THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


MUNICIPAL   PUBLIC   WORKS 


i!^^ 


MUNICIPAL  PUBLIC  WORKS 


THEIR  INCEPTION,  CONSTRUCTION 
AND  MANAGEMENT 


BY 

S.   WHINERY 

CIVIL   ENGINEER 


THE  MACMILLAN   COMPANY 

LONDON:    MACMILLAN  &  CO.,  Ltd. 
1903 

All  rights  reserved 


COPYEIGHT,   1903, 

By  the  MACMILLAN  COMPANY. 


Set  up,  electrotyped,  and  published  May,  1903. 


NarhjooB  Pvtss 

J.  S.  Cusliing  &  <'o.  —  Berwick  &  Smith  Co. 

Norwood,  Mass.,  U.S.A. 


HD 
H/r7 


/■  ro 


PREFACE 

This  book  is  intended  for  the  inexperienced  city  official 
and  for  the  urban  citizen.  Numbers  of  good  and  earnest 
men  are  elected  or  appointed  to  official  positions  in  our 
municipal  governments  whose  interests  and  previous  busi- 
ness experience  and  training  have  not  been  of  such  a 
character  as  to  lead  them  to  study  the  principles  control- 
ling, and  the  problems  that  will  be  met  with  in  conduct- 
ing, municipal  public  works,  and  who,  upon  assuming  the 
duties  and  responsibilities  of  office,  feel  that  they  are 
deficient  in  the  special  knowledge  necessary  to  enable 
them  to  discharge  intelligently  and  efficiently  the  duties 
of  their  new  positions.  The  veteran  in  municipal  service 
and  the  student  of  municipal  administration  will  not  find 
in  the  book  much  that  is  new  to  them,  although  they  may 
find  that  some  matters  are  presented  from  points  of  view 
different  from  those  to  which  they  have  been  accustomed. 

Believing  as  I  do  that  it  is  both  the  privilege  and  the 
duty  of  every  citizen  to  take  an  active  interest  and  part 
in  municipal  government,  and  particularly  in  the  carrying 
out  of  municipal  public  works,  I  have  thought  that  a 
book  of  this  character  might  help  to  arouse  such  an  in- 
terest in  those  who  have  not  previously  given  much  atten- 
tion to  the  subject,  as  well  as  to  stimulate  further  interest 
and  inquiry  among  those  already  familiar  with  it. 


14910S8 


vi  PREFACE 

Such  being  the  purpose  of  the  book,  I  have  avoided 
technical  treatment  of  the  subjects,  and  have  introduced 
statistics  and  details  only  where  they  seemed  necessary 
to  illustrate  or  enforce  the  general  statements.  The  idea 
has  been  to  deal  with  principles  rather  than  with  the 
details  of  practice. 

If  in  some  matters  I  have  departed  from  well-worn 
paths  and  traditional  views,  it  lias  been  with  the  convic- 
tion that  such  departures  are  not  only  justified  by  facts 
and  experience,  but  are  essential  to  a  correct  conception 
of  municipal  business.  Whether  these  views  be  approved 
or  not  by  those  whose  study  and  experience  entitle  their 
opinions  to  weight,  it  is  hoped  that  they  may  have  some 
value  in  stimulating  the  discussion  of  the  subjects  to 
which  they  refer. 

Recognizing  that  the  class  of  persons  whose  interest  it 
is  desired  to  enlist  is  composed  largely  of  business  men 
whose  time  is  already  closely  occupied,  I  have  endeavored 
to  be  brief,  even  at  the  risk  of  laying  myself  open  to  the 
charge  of  inadequate  treatment  on  many  points. 

A  casual  examination  will  suffice  to  show  that  I  have 
not  attempted  to  cover  in  a  scholarly  or  exhaustive  man- 
ner any  of  the  subjects  taken  up.  The  book  has  been 
written  in  the  intervals  of  other  employment,  as  leisure 
permitted,  and  with  little  attempt  to  read  up  or  consult 
authorities. 

I  at  first  intended  to  devote  a  final  chapter  to  a  brief 
bibliography  of  the  subject  of  municipal  government  and 
cognate  subjects.  But  the  literature  of  the  subject  is  so 
extensive  that  it  was  found  very  difficult  to  restrict  within 
reasonable  limits  any  list  of  books  and  papers  without 


PREFACE  vii 

great  clanger  of  omitting  much  of  equal  or  greater  value, 
since  it  is  quite  impossible  for  one  man  to  say  what  books 
will  be  of  most  interest  and  value  to  another.  Besides, 
there  already  exists  a  very  full  and  admirable  bibliog- 
raphy of  the  subject,  from  which  students  and  general 
readers  can  readily  select  the  literature  that  is  likely  to 
supply  what  they  may  think  best  suited  to  their  purpose.^ 

S.  W. 
New  York, 

May  1, 1903. 

^  "A  Bibliography  of  Municipal  Problems  and  City  Conditions." 
New  York  Reform  Club  Committee  on  City  Affairs,  52  William  Street, 
New  York.     pp.  346.     $1.50. 


CONTENTS 

CHAPTER  I 
Importance  of  Municipal  Public  Work 

PAGE 

Relative  popvdation  in  cities  and  in  country  —  Causes  of  urban  con- 
centration —  Municipal  public  works  —  "What  they  are  —  Finan- 
cial magnitude  —  Amount  of  money  expended  —  Total  sum 
expended  on  street  pavements  —  Importance,  other  than  finan- 
cial —  Effect  upon  health  —  Typhoid  fever  —  Statistics  of  — 
Other  diseases  —  Responsibility  of  municipal  officers  —  Indiffer- 
ence of  officials  and  citizens  —  Reference  to  Pittsburg,  Pa.  — 
Individual  responsibility  of  the  citizen  —  Responsibility  of 
municipal  officers 1 

CHAPTER  n 

Municipal  Organization 

Different  forms  of  municipal  government  —  Intelligent  and  honest 
administration  of  more  importance  than  form  of  government  — 
Separation  of  the  legislative  and  the  executive  branches  —  The 
department  of  public  works  —  Its  organization  —  The  executive 
head  of  the  department  —  The  legal  adviser  —  The  city  engineer 
—  The  consulting  engineer  —  Inspectors 17 

CHAPTER  III 

Preparations  for  Municipal  Work 

Projects  should  be  carefully  considered  and  worked  out  —  Precipi- 
tate action  should  be  avoided  —  Example  of  the  New  York  State 
canals  —  Ample  time  should  be  allowed  to  perfect  plans  — 
Provisions  to  pay  for  work  —  Bond  issues  —  Advantages  of  — 
Debt  limits  —  Special  assessments  —  Combination  of  bond  issue 
and  special  assessments  —  Danger  of  non-collection  of  special 


CONTENTS 

PAGE 

assessments  —  Payment  from  general  funds  —  Disadvantages  of 

—  Works  should  be  planned  as  part  of  a  general  system  —  Ex- 
perience of  other  cities  should  be  utilized  —  "Junketing"  trips 

—  Value  of  associations  of  city  oiiicials  —  Considerations  that 
should  govern  in  projecting  public  work  —  Is  the  work  neces- 
sary ?  —  Can  the  necessary  funds  be  procured  ?  —  If  debt  created 
can  it  be  paid  when  due  ?  —  Sinking  funds  —  Will  the  proposed 
work  accomplish  the  purpose  intended  ?  —  Will  it  pay  ?  —  Illus- 
tration, roads  and  pavements  —  Ample  time  should  be  given  for 
making  necessary  investigations 33 


CHAPTEE   IV 

Direct  Work  vs.  Contract  Work 

The  advantages  and  disadvantages  of  each  system  —  No  accurate 
comparison  of  results  now  possible,  and  reasons  therefor  —  Dif- 
ficulties of  doing  work  under  the  direct  system  —  Work  not 
usually  done  better  or  more  economically  under  the  direct 
system  —  Reasons  considered  —  Exceptions  —  Conditions  under 
which  the  direct  system  might  be  made  successful     ...      61 


CHAPTER   V 

Advertising,  Opening  Bids,  and  Awarding  Contracts 

What  the  advertisement  should  contain  —  Ample  time  for  preparing 
bids  should  be  allowed  —  Formal  conditions  under  which  bids 
should  be  received  —  Informal  bids  —  Bidder's  bond  and  surety 

—  Right  to  reject  any  or  all  bids  —  Should  be  freely  exercised 
where  law  allows  —  Readvertising  —  Objections  to  readvertising 

—  Documents  should  be  carefully  prepared  —  Appearance  of 
unfairness  to  be  avoided 60 

CHAPTER  VI 

The  Contract 

Object  of  the  contract  —  Necessity  for  clearness  and  definiteness  — 
Prepared  by  attorney  and  engineer,  but  should  be  examined  by 
layman  —  Power  to  enter  into  contract  —  Must  conform  to  law 


CONTENTS  xi 


PAGE 


—  The  several  parts  of  it  should  agree  —  General  principles  that 
should  govern  contracts  —  Should  be  fair  to  both  parties  —  One- 
sided contracts  —  Engineer  as  referee  —  Objections  to  —  Powers 
of  arbitrators  or  referees  —  Courts  may  review  decisions  of 
referees  —  The  bond  —  Sureties  to  bond  —  Corporate  surety 
desirable 68 


CHAPTER  VII 

The  Contractor 

The  unfavorable  reputation  of  municipal  contractors  —  Popular  esti- 
mation of  —  Contracting  not  necessarily  demoralizing  —  Con- 
tractors, as  a  class,  not  so  bad  as  represented  —  Difference 
between  contractors  under  municipal  and  under  private  corpo- 
rations—  Contracting  not  necessarily  disreputable  or  demoraliz- 
ing—  Municipal  contractors  divisible  into  three  classes  —  The 
honest  and  responsible  contractor  —  The  irresponsible  and  un- 
reliable contractor — The  "boodler"  —  Awarding  contracts  to 
the  lowest  bidder  —  Should  not  be  compulsory  —  Evils  of  com- 
pulsory award  to  lowest  bidder  —  Object  of  laws  compelling 
award  to  lowest  bidder  —  Fraud  and  collusion  not  always 
avoided  thereby  —  Impossible  to  prevent  by  legislative  enact- 
ment—  Offenders  not  often  punished  —  The  selection  of  honest 
oflBcials  the  only  preventive  —  Other  considerations  than  low 
bid  must  be  considered  in  awarding  contracts  —  Practice  of 
business  men  and  private  corporations  should  be  followed  — 
Measures  necessary  to  reform  municipal  contracting  —  Con- 
clusions        


CHAPTER  VIII 

The  Supervision  of  Public  Work 

Supervision  largely  the  duty  of  the  city  engineer  —  Supplemental 
contracts  —  Determining  the  meaning  of  vague  or  contradictory 
clauses  —  Duty  of  contractor  —  Duty  of  municipality  —  Substi- 
tution of  other  materials  and  methods  —  When  allowable  — 
Not  always  advisable  when  favorable  to  the  municipality  — 
Example  —  Inspection  of  work  —  Keeping  written  notes  and 
records  —  Complaints  and  criticisms  —  Final  inspection  of  work      95 


xii  CONTENTS 

CHAPTER  IX 

Maintenance  and  Repair  of  Public  Work 

PAGE 

Structures  may  need  repair  from  the  time  of  their  completion  — 
Provision  for  repair  should  be  promptly  made  —  Importance  of 
maintenance  —  Maintenance  and  repair  of  street  pavements  — 
Impossible  to  avoid  cutting  into  pavements  —  The  maintenance 
of  pavements  a  very  large  item  in  municipal  expenses  —  Causes 
of  excessive  cost  —  Inefficient  organization  and  management  of 
street  repair  department  —  When  profitable  to  reconstruct 
rather  than  to  repair  pavements  —  Repairing  by  contract  — 
Records  and  accounts  should  be  kept  —  Repairs  to  waterworks 
plant  —  Inspection  of  public  work  —  Supplies  for  repair  work 

—  Purchasing  agent's  department  —  The  municipal  laboratory  .     105 

CHAPTER   X 

Economy,  Real  and  False 

Value  of  economy  —  Comparison  of  results,  one  city  with  another, 
not  conclusive  —  Reasons  therefor  —  Dilficulties  of  securing 
best  economy  —  The  use  of  water  meters  and  results  attained 

—  Importance  of  preventing  waste  of  water  —  Application  of 
economy  to  street  paving —  Pavements  should  be  designed  with 
reference  to  the  quantity  of  travel  over  them  —  Extravagance 
of  wide  pavements  on  streets  of  light  travel  —  Kind  of  pavement 
should  be  selected  with  reference  to  character  and  amount  of 
travel  —  Comparison  of  ultimate  cost  of  different  pavements  — 
Other  considerations  —  Real  economy  and  low  first  cost  not 
synonymous 116 

CHAPTER  XI 

Guaranteeing  Public  Work 

Introductory  —  The  practice  open  to  question  —  General  theory  of 
guaranties  —  Practical  effects  of  guaranties  —  Their  value  de- 
pends upon  sufficient  surety  —  What  is  sufficient  surety  ?  —  Do 
contractors  add  anything  to  prices  bid,  because  of  guaranties  ? 

—  Danger  of  invalidating  guaranties  —  Objections  to  fixing  prices 
for  repairs  for  long  periods  —  Doubtful  if  guaranties  are,  upon 


CONTENTS  xiii 

PAGE 

the  whole,  advantageous  —  Question  of  legality  of  guaranties  — 
Decisions  of  the  courts  —  Objections  to  usual  form  of  guaranties 

—  Examples  —  Question  of  validity  is  of  great  importance  — 
Importance  of  care  in  drawing  guaranty  clauses  of  contracts  — 
Causes  of  failure  of  street  pavements  —  How  may  dangerous 
features  be  avoided  ?  —  Separating  maintenance  from  guaranty 

—  Guaranty  should  be  for  quantity  of  service  rather  than  for  a 
stated  time  —  Contracts  for  maintenance  —  The  whole  subject 
should  be  carefully  studied 134 

CHAPTER  XII 

Special  Assessments 

Definitions  —  General  theory  —  Necessity  for,  and  utility  of,  special 
assessments  —  A  species  of  taxation  —  General  legal  principles 
governing  —  Methods  of  apportioning  assessments — In  the  case 
of  street  pavements  —  Division  of  cost  between  the  municipality 
and  property  owners  —  The  front-foot  system  —  Illustrations  of 
its  inequitableness  —  Other  methods  of  apportionment  —  Assess-  - 
ments  for  sewers  —  Unwise  to  make  laws  inflexible  —  The  law 
relating  to  New  York  City 156 

CHAPTER   XIII 

Municipal  Accounts  and  Uniform  Accounting 

Importance  of  municipal  accounting  —  Municipal  accounts  usually 
inadequate  and  incomplete  —  Inferior  to  accounts  of  private 
business  corporations  —  Often  misleading — Incomplete  accounts 
dangerous  —  Examples  —  Ideal  system  of  accounting  —  Expert 
assistance  often  necessary  —  The  city  comptroller  —  Definition 
of  uniform  municipal  accounts  —  Necessary  in  order  to  compare 
cost  of  work  in  one  city  with  that  in  another  —  Promotion  of 
uniform  accounting  —  Should  be  provided  for  by  state  statutes 

—  What  the  law  should  require  —  Uniformity  in  practice  in 
different  states  important  —  How  it  may  be  secured  .        .        .     175 

CHAPTER  XIV 

Municipal  Ownership 

A  subject  widely  discussed  —  Must  be  decided  in  the  end  by  facts 
and  business  judgment  —  Claims  for  and  against  —  Relative  cost 


xiv  CONTENTS 

PAOB 

of  service  —  Theoretically,  service  should  be  as  economical  under 
municipal  as  under  private  ownership  —  Relative  cost  of  skill 
and  labor  —  Trivate  owner  entitled  to  reasonable  profit  —  Diffi- 
culty of  ascertaining  first  cost  to  private  owners  —  Inflating 
capital  —  Unwise  for  municipalities  to  invest  money  for  public 
service  where  it  can  be  avoided  —  Illustrations  —  Estimates  of 
cost  of  plant  not  always  reliable  —  Present  data  not  sufficient 
to  determine  cost  of  furnishing  service  —  Detroit  instanced  — 
Not  safe  to  base  conclusions  on  results  in  any  one  city —  Chicago 
electric  lighting  experience,  and  conclusions  —  Is  municipal  own- 
ership compatible  with  the  functions  of  government  ?  —  Dis- 
cussion of  the  question  —  Effect  of  municipal  ownership  upon 
municipal  government  —  Discussion  of  the  question  —  Danger 
in  a  large  increase  of  city  employees  —  Effect  of  civil  service 
system  —  Removing  management  from  politics  —  Effect  of 
bipartisan  management  —  Conclusions 189 


CHAPTER  XV 

Quasi-public  Corporations  and  their  Control 

Introductory  —  Subject  widely  discussed  —  Definitions  —  Distinction 
between  private  and  quasi-public  corporations  —  The  relation  of 
the  municipal  to  the  quasi-public  corporation  —  Faulty  fran- 
chises—  True  theory  of  quasi-public  corporations  —  Franchises 
should  be  granted  through  state  law  and  not  by  municipal 
councils  — The  fundamental  principle  that  should  govern  — 
Intimate  character  of  relations  between  quasi-public  and  mu- 
nicipal corporations  — Investment  in  quasi-public  corporations 
should  not  be  regarded  as  speculative  —  Maximum  and  minimum 
rates- Regulation  of  capital  and  publicity  of  accounts  —  Life 
of  franchises  —  Should  be  for  a  limited  period  —  Rates  for 
service  —  Should  not  be  permanently  fixed  in  charters  —  What 
are  reasonable  rates  —  Municipality  may  justly  demand  some 
part  of  income  —  Quality  of  service  —  Should  be  what  the  public 
demands  —  The  problem  to  be  solved  —  How  may  proper  rela- 
tions be  brought  about  ?  —  A  general  state  law  necessary  — 
What  such  a  law  should  provide  —  Creation  of  a  Board  to 
administer  the  law  —  Functions  of  such  a  Board  —  Dealing  with 
existing  quasi-public  corporations— Question  should  be  met  in 
a  spirit  of  fairness  and  justice 219 


MUNICIPAL   PUBLIC   WORKS 


MUNICIPAL  PUBLIC   WORKS 


CHAPTER  I 


IMPORTANCE  OF  MUNICIPAL  PUBLIC  WORKS 


The  twelftli  census  (1900)  of  the  United  States  dis- 
closes the  startling  fact  that  37.3  per  cent  of  the  whole 
population  of  the  country  lives  in  cities  and  towns  of 
4000  inhabitants  and  upward.  Nearly  one-third  of  the 
population  (33.1  per  cent)  lives  in  cities  and  towns  of 
8000  or  more  inhabitants.  The  censuses  for  past  decen- 
nial periods  show  that  the  ratio  of  urban  to  rural 
population  is  rapidly  increasing.  Thus  the  percentages 
of  the  population  comprised  in  cities  and  towns  having 
a  population  of  8000  or  more,  for  a  number  of  decades, 
as  reported  by  the  Census  Bureau,  are  as  follows  :  — 


1840 
1850 
1860 
1870 
1880 
1890 
1900 


8.5  per  cent 

12.5  "  " 

16.1  "  " 
20.9  "  " 

22.6  «'  " 

29.2  "  " 
33.1  "  " 


It  is  not  within  the  province  of  this  book  to  discuss 
the  causes  of  this  tendency  of  our  population  to  seek 
urban  life,  or  the  consequences  that  are  likely  to  result 
therefrom  in  the  future. 

B  1 


2  MUNICIPAL   PUBLIC   WORKS 

There  must,  of  course,  be  some  adequate  cause  or 
causes  for  the  growth  of  the  cities  at  the  expense  of  the 
country.  Among  these  it  will  be  conceded  that  not  the 
least  is  the  greater  public  provision  made  for  the  comfort 
and  convenience  of  the  urban  as  compared  with  the  rural 
population.  The  aggregation  of  people  into  compact 
masses  has  made  possible  and  favored  such  provision. 
Conveniences  that  it  would  be  Avell-nigh  impossible  to 
supply  at  any  cost  to  a  scattered  rural  population,  become 
attainable  at  moderate  cost  when  a  large  number  of  people 
live  in  close  proximity  to  each  other. 

Among  these  conveniences,  which  become  necessities 
to  the  urban  population,  may  be  mentioned  the  supply 
of  water  for  domestic  purposes,  sewers  for  carrying  away 
and  disposing  of  waste  matter,  protection  from  fire,  light- 
ing systems  for  supplying  light  to  dwellings  and  streets, 
improved  roadways,  schools,  libraries,  and  public  parks. 
These  and  others  of  like  character  constitute  what  are 
collectively  called  the  public  works  of  a  cit}'",  and  the 
business  of  constructing,  operating,  and  maintaining  them 
has  become  one  of  the  principal  functions  of  municipal 
government,  while  upon  them  is  expended  the  greater 
part  of  the  municipal  revenues  derived  from  taxation. 

The  construction,  operation,  and  maintenance  of  these 
municipal  public  works  have  developed  into  a  distinct 
department  of  human  activity  in  our  cities  and  towns, 
and  have  called  into  action  the  best  efforts  of  trained 
engineers  and  specialists,  requiring,  as  they  do,  a  high 
degree  of  technical  knowledge,  skill,  and  experience,  as 
well  as  of  business  capacity. 

Considered  in  their  financial  aspect  alone,  the  municipal 


IMPORTANCE   OF   MUNICIPAL   PUBLIC   WORKS       3 

public  works  of  our  towns  and  cities  assume  such  a  de- 
gree of  importance  as  to  merit  careful  consideration. 
Unfortunately,  the  statistics  of  the  business  have  never 
been  properly  collected  and  published,  and  we  have  no 
exact  data  relating  to  the  money  now  invested  in  improve- 
ments of  this  character,  or  of  the  cost  of  operating  and 
maintaining  public  works  in  the  past.  Very  recently  the 
Department  of  Labor  at  Washington,  acting  under  a  law 
passed  by  Congress  in  1888,  has  made  a  very  creditable 
effort  to  collect  and  publish  statistics  of  the  public  works 
of  all  cities  in  the  United  States  having  a  population  of 
30,000  and  more.  The  latest  results  of  this  investigation 
are  published  in  Bulletin  No.  36  of  that  Department,  is- 
sued in  September,  1901.  No  statistics  of  the  total  amount 
of  money  invested  in  municipal  public  works  are  given,  but 
only  the  expenditure  for  the  preceding  fiscal  year.  These 
will,  however,  serve  to  give  an  idea  of  the  magnitude  of 
the  work  and  the  enormous  sums  of  money  devoted  to  it. 
Some  of  the  items  are,  in  round  numbers,  as  follows:  — 

For  Construction  and  Capital  Account 
Expended  on  streets $26,654,600 


"  sewers 

"  water  supply 

"  docks,  ferries,  bridges,  markets 

"  electric  lights  and  gas-works 


parks  and  gardens,  bath-houses,  etc.       5,221,400 


schools 

libraries,  art  museums  . 
fire  departments    . 
police,  police  courts,  jails,  work- 
houses, and  reformatories  . 
health  and  hospitals 


9,429,300 

14,767,100 

5,009,200 

344,100 


14,849,700 
1,936,000 
2,074,800 

812,200 
950,500 

182,048,900 


4  MUNICIPAL   PUBLIC   WORKS 

For  Operation  and  Maintenance 

Expended  on  street  cleaning  and  sprinkling    .       $10,871,300 

"          "    streets  and  pavements        .        .  11,248,200 

"          "   sewers 3,268,300 

"          "    water  supply        ....  15,436,000 

"           "    docks,  ferries,  bridges,  markets  .  3,165,600 
"          "   electric  light  and  gas  works,  and 

lighting 14,612,600 

"          "    parks  and  gardens       .        .        .  6,021,200 

"          "    schools 64,458,500 

"  "    libraries,  art  galleries,  museums,  etc.      2,814,800 

«          "    fire  departments          .        .        .  22,949,300 
"           "    police  courts,  jails,  workhouses, 

and  reformatories      .         .         .  4,672,500 

"          "    health,  hospitals,  almshouses,  etc.  15,902,600 

*'          "   garbage  removal  and  treatment .  5,113,000 

$180,533,900 

It  appears  from  this  statement  that  the  total  amount  of 
money  expended  upon  public  works  in  that  one  year  in 
these  cities  was  1262,582,800. i 

The  population  of  the  135  cities  embraced  in  the  inquiry 
was,  according  to  the  twelfth  census  (1900),  about  19,000,- 
000.  It  appears,  therefore,  that  these  cities  expended  in 
that  year  for  the  public  works  named  above,  an  average 
of  14.32  per  capita  for  construction  and  capital  account, 

1  These  figures  are  not  official.  In  the  report  only  the  items  for  each 
city  are  given,  and  I  have  computed  the  totals.  It  should  be  stated,  also, 
that  some  of  the  figures  given  in  the  report  are  not  claimed  to  be  strictly 
correct.  Owing  to  the  different  methods  of  keeping  accounts  in  the  vari- 
ous cities,  the  correct  figui'es  for  each  item  were  not  always  obtainable 
by  the  Department  of  Labor,  and  items  were  often  found  charged  to  one 
account  that  should  have  been  charged  to  another,  or  the  accounts  were 
not  subdivided  as  in  the  report.  Attention  is  called  to  these  facts  by  foot- 
notes and  explanations  in  the  report.  The  figures  given  are,  however, 
sufficiently  accurate  for  our  purpose. 


IMPORTANCE   OF   MUNICIPAL   PUBLIC   WORKS       5 

and  of  19.50  per  capita  for  operation  and  maintenance,  or 
a  total  of  1)13.82  per  capita  for  both. 

Large  as  tliese  sums  are,  tliey  do  not  by  any  means  cor- 
rectly represent  the  whole  amount  of  money  expended 
upon  the  public  works  of  these  cities,  because  in  many 
instances  such  works  belong  to  private  corporations,  and 
the  accounts  of  these  do  not  appear  in  the  report  of  the 
Department  of  Labor.  In  the  greater  number  of  the 
cities  the  gas  supply  does  not  belong  to  the  municipal 
corporation.  In  a  large  number  the  water  suppl}^  is 
owned  and  operated  b}'^  private  companies,  and  this  is  also 
true  of  electric  lighting  plants  in  many  cities.  Not  only 
are  these  semi-public  works  supported  by  the  residents  of 
the  cities,  but  a  liberal  interest  on  their  cost  and  usually  a 
fair  profit  on  their  business  is  paid  through  charges  for 
the  service  rendered. 

As  remarked  above,  we  have  no  data  from  which  to  as- 
certain the  total  amount  of  money  invested  in  public 
works  in  these  cities.  In  one  department,  however,  the 
report  referred  to  gives  statistics  from  which  we  may  esti- 
mate approximately  the  whole  amount  expended  for  con- 
struction in  that  department.     I  refer  to  street  paving. 

The  report  of  the  Department  of  Labor  for  the  pre- 
ceding year  (Bulletin  No.  30  for  the  year  ending  Sep- 
tember, 1900)  gives  the  number  of  square  yards  of  street 
pavements  of  the  different  kinds  in  129  cities  embraced 
in  that  report.  We  know  approximately  the  average 
cost  per  square  yard  of  the  several  varieties  of  pave- 
ments, and  using  these  prices  we  may  arrive  at  a  fair 
idea  of  the  amount  invested  in  street  pavements  in  these 
129  cities,  as  follows:  — 


MUNICIPAL   PUBLIC   WORKS 


21,680,245  sq. 

yds 

.  cobble  stone                        at 

$  .80 

$  17,344,196.00 

32,716,515  " 

granite  block                        " 

3.50 

114,507,802.50 

21,738,210  " 

brick                                       " 

2.25 

48,910,972.50 

27,733,572  " 

wooden  block                       " 

1.25 

34,667,965.00 

84,471,804  " 

asphalt  and  asphalt  block   " 

2.75 

94,797,461.00 

83,841,445  " 

Macadam                              " 

.75 

62,881,083.75 

58,604,397  " 

gravel                                     " 

.70 

41,023,077.75 

18,432,210  " 

all  other  kinds                     " 
Total 

1.00 

18,432,210.00 
$432,564,768.50 

It  is  unnecessary  to  argue  that  the  agencies  and  methods 
employed  in  dealing  with  these  enormous  sums  are  worthy 
of  careful  and  respectful  consideration  from  a  purely  finan- 
cial point  of  view  alone.  When,  in  addition,  we  appre- 
ciate that  more  than  one-third  of  the  population  of  the 
whole  nation  is  directly  or  indirectly  affected  physically, 
financially,  and  even  intellectually,  morally,  and  socially 
by  the  fidelity  and  skill  with  which  so  vast  a  trust  is 
administered  by  municipal  authorities,  the  whole  subject 
assumes  an  importance  that  cannot  well  be  exaggerated. 
The  very  grave  responsibility,  therefore,  that  devolves 
upon  those  charged  with  the  administration  of  so  vast 
and  important  a  trust  cannot  be  overestimated  when 
soberly  considered.  It  is,  for  instance,  a  well-understood 
fact  that  certain  among  the  most  dreaded  diseases  to 
which  we  are  subject  have  their  origin  in,  and  are  propa- 
gated and  spread  through,  the  medium  of  impure  water 
for  domestic  service,  or  through  defective  sewerage.  Thus 
it  may  be  considered  as  definitely  settled  that  typhoid 
fever  is  caused  by  a  specific  germ,  and  that  this  germ  is 
introduced  into  the  human  system  through  the  medium 
of  water  used  for  drinking  or  culinary  purposes.  This 
being  so,  it  must  follow  that  if  pure  water  only,  free  from 


IMPORTANCE   OF  MUNICIPAL   PUBLIC   WORKS       7 

this  specific  germ,  were  supplied  to  and  used  by  all  in- 
habitants of  our  cities,  this  terrible  disease  would  probably 
disappear  entirely,  or  at  any  rate  its  ravages  would  be  so 
greatly  reduced  that  it  would  become  one  of  the  least  im- 
portant of  the  scourges  that  now  afflict  us.  The  report 
above  referred  to  gives  a  list  in  detail  of  deaths  from  cer- 
tain diseases  in  the  135  cities  dealt  with,  from  which  it 
appears  that  the  deaths  from  typhoid  during  the  year 
amounted  to  a  total  of  6546,  or  more  than  34  for  each 
100,000  of  population.  As,  in  this  disease,  at  least  five 
cases  recover  where  one  proves  fatal,  we  may  estimate 
that  the  total  number  of  cases  occurring  in  these  cities 
during  the  year  was  in  the  neighborhood  of  39,276. 

Experience  in  cities  where  water  of  a  high  degree  of 
purity  is  supplied  indicates  that  it  is  quite  practicable  to 
reduce  the  deaths  from  typhoid  to  a  number  not  exceed- 
ing five  for  each  100,000  of  population.  If  this  were  ac- 
complished in  each  of  the  135  cities,  it  would  result  in  a 
saving  of  over  5600  lives  annually.  The  economic  value 
of  a  human  life  has  been  variously  estimated.  It  may  be 
conservatively  placed  at  not  less  than  $5000.  At  this  rate 
the  value  of  the  5600  lives  that  might  be  saved  annually 
from  this  disease  reaches  the  enormous  sum  of  128,000,000. 
This  figure  does  not  take  into  consideration  the  loss  of 
time  and  the  incidental  expenses  that  may  be  fairly  charged 
against  the  disease,  on  account,  not  only  of  those  who  die, 
but  of  those  who  recover.  In  the  report  of  the  Engineer 
Commission  on  the  extension  and  betterment  of  the  water 
supply  of  Cincinnati,  Ohio,  dated  March  20,  1896,  this 
subject  was  considered,  and  I  cannot  do  better  than  to 
quote  from  what  was  said  therein :  — 


8  MUNICIPAL  PUBLIC   WORKS 

"The  average  annual  loss  from  typhoid  fever  in  the 
city  of  Cincinnati  during  the  past  six  years  was  164  lives, 
which,  under  the  laws  of  this  state,  may  be  valued  at 
110,000  each.  For  each  fatal  case  of  typhoid  there  were 
not  less  than  five  cases  which  recovered  ;  or  the  probable 
number  of  cases,  exclusive  of  victims  who  perished  in 
their  battle  with  this  disease,  has  been  an  average  of  820 
for  the  past  six  years,  making  a  total  of  984  cases.  The 
average  cost  of  medical  attendance  to  all  cases  can  be  put 
at  $40,  and  the  average  loss  of  time  from  work  or  school 
of  those  who  recover  is  found  to  be  about  six  weeks, 
which  time  can  be  valued  at  common  laborer's  wages,  or 
$1.50  a  day.  The  cost  of  burial  of  those  who  died  can 
be  taken  on  an  average  at  $60  each,  from  which  we  de- 
duce the  following  yearly  cost  of  typhoid  fever  in  this 
city  alone  :  — 


164  fatal  cases      .     . 

at  $10,000.00    . 

.    11,640,000.00 

820  X  36  cases     .     . 

(( 

1.50     . 

44,280.00 

984  doctor  bills    .     . 

a 

40.00     . 

39,360.00 

164  burials .    .    .    . 

u 

60.00     . 

9,840.00 

Total 

.    $1,733,480.00 

a  sum  which,  if  capitalized  at  four  per  cent  for  forty 
years,  represents  $34,310,162.92.  This  estimate,  of 
course,  does  not  take  into  account  the  number  of  cases 
and  deaths  among  non-residents  who  may  drink  the 
water  while  in  the  city,  and  return  to  their  homes  before 
the  symptoms  of  typhoid  develop." 

Even  if  we  discount  these  figures  very  largely  and 
apply  the  same  line  of  reasoning  to  the  135  cities 
we  are  considering,  the  results  will  still  be  of  such 
magnitude    as    to    be    appalling.      The    figures    quoted 


IMPORTANCE   OF   MUNICIPAL  PUBLIC  WORKS       9 

assume  a  total  loss  of  f|10,576  for  each  fatal  case. 
Let  us  assume  that  the  average  loss  would  not  exceed 
(^5500  per  fatal  case.  We  shall  then  have,  as  the  cost 
represented  by  5600  fatal  cases,  131,800,000  annually, 
which  capitalized  at  four  per  cent  per  annum  for  thirty 
years  (the  reasonable  life  of  a  water  works  system) 
amounts  to  the  enormous  sum  of  nearly  1550,000,000, 
and  this  sum  might  therefore  be  profitably  expended  by 
these  cities  in  procuring  a  water  supply  sufficiently  pure 
to  reduce  the  typhoid  fever  death-rate  to  five  in  100,000 
of  population.  Typhoid  fever  is  only  one  of  the  many 
diseases  that  are  directly  caused  by,  or  whose  propagation 
and  malignity  are  largely  increased  by,  preventable  unsani- 
tary conditions  in  our  cities.  It  is  true  that  in  no  other 
infectious  disease  is  the  specific  cause  so  well  known  and 
the  channel  through  which  it  enters  the  human  body  so 
definitely  understood  and  so  limited  as  in  typhoid  fever, 
but  abundant  observation  has  proved  beyond  doubt  that 
a  number  of  other  diseases  may  be  limited  and  controlled 
by  strict  attention  to  sanitation.  The  fact  that  smallpox, 
scarlet  fever,  diphtheria,  and  diarrhoea  are  most  prevalent 
and  most  fatal  in  those  parts  of  a  city  where  least  atten- 
tion is  given  to  cleanliness  and  sanitation  is  sufficient 
proof  that  there  is  a  close  connection  between  these 
diseases  and  filthy  and  unwholesome  surroundings. 
Unclean  streets  are  believed  greatly  to  aggravate,  if 
they  do  not  directly  cause,  the  epidemics  of  la  grippe 
so  common  recently  in  our  cities.  The  great  mortality 
among  children  from  diarrhoeal  diseases  is  known  to  be 
largely  caused  by  impure  water  and  unsanitary  environ- 
ments. 


10  MUNICIPAL   PUBLIC   WORKS 

The  total  deaths  from  the  diseases  named  (excluding 
typhoid)  in  the  135  cities,  during  the  year  covered  by 
the  report,  is  as  follows  :  — 

Deaths  from  smallpox 589 

"         "     scarlet  fever 2,180 

"         "     diphtheria 9,712 

"         "     dysentery,  and  diarrhoea  and  enteritis  26,655 

Total 39,136 

If  the  mortality  from  these  diseases  could  be  decreased 
but  ten  per  cent  (and  no  one  doubts  that  this  could  be 
done)  by  proper  sanitation,  it  would  result  in  the  sav- 
ing of  nearly  4000  lives  annually  in  these  cities. 

It  thus  appears  that  the  responsibility  of  municipalities 
in  this  one  matter  of  the  protection  of  human  life  from 
preventable  disease  is  overwhelming.  We  tolerate  this 
unnecessary  human  suffering  and  loss  of  life  because  we 
have  grown  to  consider  it  a  matter  of  course.  If  some 
great  accident,  due  to  the  carelessness  or  neglect  of  the 
city  officials,  had  occurred  in  Pittsburg  in  the  year  1901, 
resulting  in  the  sudden  death  of  100  people,  the  whole 
country  would  have  been  filled  with  horror  and  with 
just  indignation  at  the  criminal  negligence  of  those 
whose  want  of  care  and  proper  precaution  made  such  a 
disaster  possible.  And  yet  in  that  year  464  persons  died 
in  that  city  of  typhoid  fever,  and  it  is  as  certain  as  any- 
thing human  can  be  that  at  least  350  of  these  deaths 
would  not  have  occurred  had  the  city  been  supplied  with 
pure  water. 

There  are  indications  that  the  apathy  that  permits  this 
needless  destruction  of  iiuman  life  to  go  on  will  not 
always  be  tolerated,  and  that  the  time  will  come  when 


IMPORTANCE   OF  MUNICIPAL  PUBLIC   WORKS     11 

municipal  governments  will  be  held  responsible  by  the 
courts  for  such  palpable  offences  against  human  life. 
Recent  cases  before  the  courts  seem  to  indicate  that  they 
are  disposed  to  award  appropriate  damages  for  lives 
sacrificed  through  failure  of  city  authorities  to  exercise 
proper  preventive  care.  Certain  classes  of  accidental 
injuries,  due  to  criminal  neglect  on  the  part  of  municipal 
corporations,  have  long  been  recognized  as  cases  for  sub- 
stantial money  damages,  and  when  we  consider  the  matter, 
it  is  difficult  to  see  why  deaths  or  injuries  resulting  from 
a  preventable  polluted  water  supply  should  not  be  placed 
in  the  same  category  as  those  due  to  careless  neglect  of 
dangerous  holes  or  trenches  in  the  streets,  which  are  now 
recognized  as  actionable  causes  for  damages.  Should  the 
courts  adopt  and  act  upon  this  view  in  the  future,  they 
would  do  more  to  call  attention  to  the  importance  of  pure 
water  supplies  than  can  be  hoped  for  from  any  other 
source.  It  w^ould  at  once  be  realized  that  no  city  could 
afford  to  poison  its  citizens  with  polluted  water,  if  a  supply 
of  pure  water  could  possibly  be  procured.  Taxpayers 
and  city  officials  would  no  longer  look  on  with  apathy 
while  hundreds  of  human  lives  were  being  sacrificed 
through  criminal  neglect. 

It  is  not  alone  in  the  matter  of  sanitation  and  regard 
for  the  health  and  the  lives  of  the  population  that  munici- 
pal public  works  are  of  great  importance.  The  industrial 
and  commercial  prosperity  of  a  city  may  be  largely 
affected  thereby.  Pure  and  clean  water  is  a  necessity 
in  not  a  few  lines  of  manufacture,  and  the  possession  or 
absence  of  an  abundance  of  it  may  attract  or  repel  enter- 
prises of  this  character.     Well-paved  streets  directly  affect 


12  MUNICIPAL  PUBLIC   WORKS 

the  people  and  the  prosperity  of  a  city  in  a  financial  way 
The  difference  in  the  cost  of  conducting  business  over 
poorly  paved  and  well-paved  streets  is  not  easily  reduced 
to  the  form  of  a  definite  account,  but  it  may  be  shown  to 
be  so  great,  that  the  cost  of  providing  and  maintaining 
good  pavements  becomes,  relatively,  an  unimportant  item. 
Schools  of  a  high  degree  of  excellence,  housed  in  commo- 
dious buildings  and  well  supplied  with  the  physical 
equipment  for  their  successful  operation,  are  a  positive 
element  in  attracting  the  class  of  citizens  that  make  a 
city  commercially  great,  to  say  nothing  of  their  vast  influ- 
ence upon  the  moral  and  social  development  of  the  com- 
munity. 

Again,  the  prices  at  which  public  service  is  supplied 
have  a  direct  effect  upon  the  commercial  prosperity  of  a 
city.  Cheap  water,  cheap  light,  and  low  taxes  have  a 
powerful  influence  not  only  in  fostering  existing  indus- 
trial and  commercial  enterprises,  but  in  attracting  new 
ones  to  a  city,  and  while  natural  conditions  over  which 
we  have  no  control  often  determine  the  cost  of  such  public 
service,  careful  and  intelligent  management  of  public 
works  may  often  materially  reduce  that  cost.  In  short, 
it  may  be  asserted  without  fear  of  denial  that  all  public 
works  which  promote  the  health  and  the  physical  welfare 
of  the  citizens  of  a  city,  or  that  tend  to  facilitate  the  trans- 
action of  business,  have  a  potential  influence  upon  its 
growth   and  commercial  prosperity. 

That  there  is  a  relation  between  the  character  of  the 
pu])lic  works  of  a  city  and  the  morals  of  its  citizens  is  so 
well  understood  that  it  need  not  be  argued,  though^  the 
relation  is  not  so  tangible  as  are  the  commercial  features 


IMPORTANCE   OF  MUNICIPAL   PUBLIC  WORKS     13 

referred  to  above.  The  moral  value  to  any  community 
of  superior  schools  is  universally  acknowledged.  The 
benefits  of  public  parks  are  not  confined  to  their  sanitary 
value  alone,  and  it  is  now  hardly  necessary  to  argue  that 
clean,  well-paved,  and  well-lighted  streets  have  a  distinct 
moral  influence  upon  those  living  along  them. 

The  subject  of  this  chapter  is  one  that  admits  of  and 
invites  expansion  to  an  almost  unlimited  extent,  but 
reasonable  brevity  forbids  pursuing  it  farther.  What 
has  been  said  should  be  sufficient  to  call  attention  to  and 
illustrate  the  very  great  importance  of  the  public  works 
of  a  city  from  whatever  point  of  view  we  may  approach 
the  subject.  No  one  who  will  seriously  consider  the 
matter  can  fail  to  realize  this  fact.  Unfortunately  the 
average  citizen  seems  not  to  give  the  matter  serious  atten- 
tion. He  regards  the  public  works  of  the  city  where  he 
lives  as  a  matter  of  course,  requiring  no  interest  or  atten- 
tion on  his  part,  unless  they  happen  directly  to  affect  his 
property  or  to  increase  his  taxes.  Like  the  dwellers  at 
the  foot  of  a  slumbering  volcano,  he  becomes  unmindful 
of  its  rumblings  and  warnings  because  they  are  common, 
everyday  affairs,  that  do  not  challenge  his  attention.  His 
mind  becomes  callous  to  danger  and  even  to  death  so  long 
as  it  does  not  come  home  directly  to  him  or  his,  particu- 
larly if  the  approach  of  danger  is  insidious  or  unobtrusive. 
Hundreds  of  his  fellow-citizens  may  be  dying  as  the 
direct  result  of  causes  which  he  can  help  to  prevent, 
and  which  it  is  the  duty  of  the  municipal  corporation,  of 
which  he  is  a  part,  to  prevent,  and  yet  he  stands  idly  by 
without  raising  a  voice  in  protest  or  a  hand  in  defence. 
If  it  were  known  that  some  dire  calamity  threatened  to 


14  MUNICIPAL   PUBLIC    WORKS 

visit  the  city  of  Pittsburg  at  a  stated  time,  in  which  half 
a  thousand  of  her  citizens  might  perish,  is  it  supposable 
that  every  resource  of  the  municipality  and  of  its  citizens 
would  not  be  exerted  to  the  utmost  to  ward  off  the 
danger  ?  Would  not  every  question  of  cost,  of  law,  of 
politics,  and  of  expediency  be  cast  aside  if  necessary,  until 
the  public  safety  were  provided  for?  And  yet,  in  that 
city,  where  over  four  hundred  people  die  annually  from  a 
disease  that  is  as  surely  preventable  as  famine,  we  have 
the  spectacle  of  city  officials,  politicians,  and  quibblers 
over  things  comparatively  unimportant,  delaying,  for  this 
reason  and  that,  the  construction  of  a  public  work  to  sup- 
ply the  pure  water  that  would  remove  entirely,  or  would 
at  least  reduce  to  an  insignificant  minimum,  the  cause  of 
the  great  mortality,  while  the  citizens  stand  by,  idle  spec- 
tators of  acts  which  lack  only  the  element  of  motive  to 
become  heinous  crimes.  That  unfortunate  city  is  not 
singled  out  as  an  only  offender  against  the  life,  health,  and 
welfare  of  its  citizens,  but  merely  as  a  conspicuous  example 
at  this  particular  time  (April,  1902). 

It  cannot  be  too  strongly  impressed  upon  the  minds  of 
the  public,  that  every  citizen  is  morally  guilty  of  complic- 
ity in  crime  when  he  stands  quietly  by  while  his  neigh- 
bors are  robbed  or  murdered,  without  his  active  protest 
and  interference,  whether  the  perpetrators  be  highway- 
men or  be  city  officials,  otherwise  respectable.  This  is 
strong  language,  but  any  one  who  soberly  considers  the 
facts  must  agree  that  it  is  fully  warranted.  Even  if  duty 
is  disregarded,  it  would  seem  that  not  only  personal  inter- 
est, but  public  spirit  and  local  patriotism  would  impel  the 
citizen  to  take  a  deep  and  active  interest  in  matters  which 


IMPORTANCE   OF   MUNICIPAL  PUBLIC   WORKS     15 

so  surely  and  inevitably  affect  the  prosperity  of  the  city 
or  town  in  which  he  lives. 

The  principle  of  the  individual  responsibility  of  the 
citizen  must  lie  at  the  foundation  of  all  schemes  of  reform 
and  improvement  in  municijDal  government.  So  long  as 
the  elector  is  careless  and  indifferent,  the  elected  officer 
can  scarcely  be  expected  to  be  otherwise.  When  the  indi- 
vidual citizen  demands  that  the  public  works  of  a  city 
shall  be  administered  upon  a  high  plane  of  efficiency,  the 
demand  will  be  met  and  enforced.  It  is  therefore  one  of  the 
most  important  duties  of  urban  citizenship  to  take  an  active 
interest  in  municipal  public  works,  and  to  give  them  a 
proper  share  of  careful  attention  and  best  thought.  If 
this  duty  were  more  generally  discharged,  one  of  the  first 
results  that  might  be  expected  would  be  the  selection  of 
a  higher  class  of  officials  to  whom  must  be  intrusted  the 
construction  and  operation  of  these  public  works  ;  men 
who  would  appreciate  the  dignity,  the  importance,  and 
the  responsibility  of  the  positions  they  occupy,  and  who 
would  bring  to  their  work  not  only  the  necessary  ability, 
but  a  full  realization  of  the  obligations  imposed  upon  them. 

That  the  average  city  official  does  not  appreciate  the 
responsibility  that  he  takes  upon  himself  in  accepting 
public  office  is  as  obvious  as  it  is  deplorable.  The  fact 
that  this  responsibility  is  shared  with  him  by  fellow-offi- 
cials equally  careless  of  the  public  welfare  may  help  to 
account  for  but  cannot  excuse  his  own  disregard  of  duty. 
If  he  would  stop  soberly  to  consider  the  extent  to  which 
not  only  the  material  and  financial  interests  of  the  com- 
munity, but  the  happiness,  the  health,  and  even  the  lives 
of  a  considerable  number  of  his  fellow-citizens  are  affected 


16  MUNICIPAL  PUBLIC  WORKS 

by  the  fidelity,  skill,  and  business  ability  with  which  the 
public  works  of  a  city  are  conducted,  it  would  seem  that 
he  could  not  escape  a  sense  of  duty  and  responsibility  that 
is  now  rarely  found  among  municipal  officials. 

In  the  face  of  such  responsibility  no  right-minded  man 
will  solicit  or  accept  office  from  motives  of  political  power 
or  personal  gain  alone. 


CHAPTER   II 
MUNICIPAL  ORGANIZATION 

The  question,  What  is  the  best  form  of  government  for 
municipalities,  has  received  a  great  deal  of  attention  in 
recent  years.  A  number  of  different  systems,  with  vari- 
ous modifications,  have  been  proposed,  and  some  of  them 
have  been  tried,  or  are  being  tried,  with  various  degrees 
of  success.  I  have  no  intention  of  entering  into  the  gen- 
eral discussion  of  the  subject.  For  our  present  purpose 
we  are  interested  only  in  that  branch  of  it  relating  to  the 
organization,  construction,  and  management  of  municipal 
public  works. 

While  one  form  of  municipal  government  may  be  dis- 
tinctly better  than  another,  the  idea  that  seems  to  be  held 
by  many  good  people  that  the  enactment  of  improved  laws 
will  of  itself  bring  about  the  regeneration  of  municipal 
affairs  is  sure  to  prove  misleading.  The  most  clumsy 
and  inadequate  system  of  laws  and  organization  cannot 
preA'ent  good  municipal  administration,  though  it  may 
make  such  administration  more  difficult  and  laborious. 
On  the  other  hand,  the  most  complete  and  perfect  system 
that  can  be  devised  will  not  of  itself  provide  a  remedy  for 
stupidity,  inefficiency,  and  dishonesty  among  municipal 
officers.  Whatever  may  be  the  safeguards  against  igno- 
rance and  carelessness,  or  the  penalties  against  dishonesty 
and  corruption,  provided  by  the  laws,  men  will,  if  they 
c  17 


18  MUNICIPAL   PUBLIC   WORKS 

are  so  inclined,  find  ways  to  disregard  or  to  evade  them. 
We  must,  therefore,  rely  upon  the  personal  intelligence, 
capacity,  and  integrity  of  the  men  we  intrust  with  the 
administration  of  our  municipal  business.  It  is  not 
intended  to  discourage  efforts  to  improve  municipal  law 
and  organization.  On  the  contrary,  such  efforts  should 
be  stimulated  in  every  practicable  way.  Undoubtedly 
great  improvements  can  be  made  in  even  those  systems 
which  are  now  considered  most  nearly  ideal.  Every 
measure  that  will  tend  to  simplify  and  facilitate  the  prac- 
tical conducting  of  works  of  public  improvement,  or  that 
will  provide  greater  safeguards  against  carelessness  or 
corruption,  should  be  welcomed  by  every  good  citizen. 
But  legislative  enactments  cannot,  alone,  be  relied  upon. 
One  principle  seems  to  be  generally  accepted  among 
practical  as  well  as  theoretical  students  of  municipal  gov- 
ernment ;  namely,  that  the  legislative  and  the  executive 
departments  should  be  independent  of  each  other.  We 
need  not  stop  to  review  the  arguments  for  or  against  this 
proposition,  as  the  subject  has  been  widely  discussed, 
and  may  be  regarded  as  settled.  The  practical  applica- 
tion of  this  principle  is  much  easier  in  the  larger  than  in 
the  smaller  cities  and  towns,  where  the  simplest  form  of 
government  is  desirable,  if  not  essential.  The  practice  of 
uniting  in  one  body  all  the  functions  necessary  to  control 
works  of  public  improvement  is  too  deeply  rooted  in  the 
smaller  municipalities  to  be  readily  or  quickly  changed, 
however  desirable  such  a  change  might  be.  We  shall 
therefore  probably  continue  to  have  a  single  body  —  the 
Council  or  its  equivalent  —  both  enacting  the  legislation 
for  and  controlling  the  execution  of  public  improvements. 


MUNICIPAL   ORGANIZATION  19 

The  more  ideal  plan  of  separating  tlie  two  departments 
can,  however,  be  approximated  in  practice,  by  giving  the 
proper  officer  of  the  council  —  usually  its  engineer  —  a 
free  hand  in  carrying  out  its  enactments.  Assuming  that 
such  officer  is  competent  and  trustworthy  (and  no  one 
ought  to  be  employed  who  is  not),  this  should  always  be 
done.  In  the  larger  municipalities,  where  a  somewhat 
more  complex  government  is  possible  and  practicable,  the 
two  departments  should  be  created  and  maintained  sepa- 
rate and  distinct  from  each  other. 

Our  present  inquiry  relates  more  directly  to  the  execu- 
tive department  of  municipal  activity,  —  the  department 
charged,  after  the  necessary  legislation  is  provided,  with 
the  design,  construction,  and  maintenance  of  the  city's 
public  works.  Two  general  schemes  for  the  organization 
of  such  a  department  have  been  advocated  and  are  now 
quite  widely  in  use.  In  the  one  most  common,  the  duties 
of  the  department  are  intrusted  to  a  Department  of 
Public  Works,  the  head  of  which  may  be  a  single  indi- 
vidual, or  a  board  of  two  or  more  individuals,  who  assume 
the  whole  responsibility  for  the  conduct  of  its  affairs. 
They  appoint  the  heads  of  such  sub-departments  as  may 
be  created,  and  control  the  entire  personnel  of  the  organi- 
zation. In  the  second,  the  Mayor  is  made  the  executive 
head  of  the  department,  and  he  must  assume  the  ultimate 
responsibility  for  all  its  acts.  He  appoints  the  heads  of 
departments,  who  report  to  him  and  act  as  his  advisory 
board.  The  details  of  this  system  are  so  generally  under- 
stood that  I  need  not  go  into  them  here.  It  is  the  system 
now  generally  advocated  for  the  larger  municipalities,  and 
is  in  successful  operation  in  a  number  of   them,  but  its 


go  MUNICIPAL   PUBLIC  WORKS 

unsatisfactory  working  in  at  least  one  large  city  offers 
additional  proof,  if  any  were  needed,  that  dependence 
cannot  be  placed  on  the  most  perfect  system  unless  it 
is  supported  by  good  administration.  One  of  the  strong- 
est arguments  in  its  favor  is  that  it  concentrates  authority 
and  definitely  places  responsibility  upon  a  single  officer 
elected  directly  by  the  people.  This  argument  applies 
equally,  so  far  as  authority  and  responsibility  are  con- 
cerned, to  a  single-headed  department  of  public  works, 
whether  the  position  be  filled  by  election  or  by  appoint- 
ment. On  the  other  hand,  it  is  claimed,  and  not  without 
a  show  of  reason,  that  where  the  executive  head  is  a  body 
of  two  or  more  persons,  their  collective  judgment  is  more 
likely  to  be  correct  than  that  of  a  single  individual. 

The  qualities  of  mind  needed  in  the  executive  head  of 
a  department  of  ijublic  works  are,  first  of  all,  integrity 
and  executive  capacity.  He  should  be  a  man  capable  of 
managing  business  enterprises  upon  business  principles 
and  by  business  methods.  He  must  therefore  be  a  man 
of  sound  judgment  and  strong  character,  equable  and 
diplomatic  in  temperament,  and  a  good  judge  of  men 
and  of  human  nature.  He  must  have  the  ability  to  de- 
cide rightly  and  the  firmness  to  stand  by  his  decisions 
when  made.  He  should  have  had  experience  in  public 
affairs  and  business  enterprises.  Technical  education  or 
training  is  not  essential,  though  very  desirable.  There 
seems  to  exist,  unfortunately,  a  prejudice  against  profes- 
sional or  technical  men  for  positions  of  executive  char- 
acter, that  is  not  justified  by  experience.  To  assume 
tliat  a  man  is  fitted  for  executive  work  solely  because 
he   possesses   technical    knowledge   or   experience   is    to 


MUNICIPAL   ORGANIZATION  21 

make  a  grave  mistake  ;  to  assume  that  he  is  not  a  capa- 
ble executive  because  of  his  technical  training  is  to 
make  a  still  graver  mistake.  Executive  capacity  is  a 
quality  of  mind  that  cannot  always  be  acquired,  though 
it  may  be  greatly  developed  by  education  and  experience. 
But  assuming  that  it  exists,  a  thorough  knowledge,  tech- 
nical or  otherwise,  of  the  particular  work  to  be  done,  must 
be  of  great  value  to  any  executive  officer.  It  is  a  suffi- 
cient answer  to  the  charge  that  technical  or  professional 
men  are  not  competent  as  executives,  to  point  to  the 
almost  innumerable  positions  of  that  character  success- 
fully held  in  the  business  world  by  that  class  of  men. 

The  position  of  Director  of  Public  Works  is  not  one  for 
the  professional  politician  unless  he  possesses  the  requisite 
special  qualifications,  which  many  of  them  do,  being  gener- 
ally men  of  affairs;  nor  for  the  partisan  favorite  w^io  is 
entitled  to  reward  for  political  services  ;  nor  for  the 
worthy  incompetent  who  may  need  the  salary ;  nor,  un- 
less they  have  the  necessary  ability,  for  the  brother, 
uncle,  cousin,  or  aunt  of  any  magnate  among  the  powers 
that  be.  It  is  a  position  that  should  be  filled  upon  sound 
business  principles,  just  as  a  business  man  would  fill  the 
position  of  manager  of  his  w^orks.  These  are  trite  obser- 
vations, but  we  see  them  so  frequently  disregarded  that 
their  repetition  can  do  no  harm. 

The  position  of  legal  counsellor,  during  the  prepara- 
tions for  and  the  construction  of  public  works,  is  one  of 
very  great  importance.  In  many  cities  of  the  smaller 
class  it  is  not  unusual,  from  motives  of  economy,  for  the 
office  of  corporation  attorney  to  be  filled  by  a  young  and 
comparatively  inexperienced  lawyer,  or  one  of  mediocre 


22  MUNICIPAL  PUBLIC  WORKS 

attainments,  whose  ability  may  be  quite  sufficient  for  the 
ordinary  routine  business.  But  when  ordinances  are  to 
be  framed  for  the  expenditure  of  large  sums  of  money,  or 
when  important  legal  questions  arise  during  the  progress 
of  costly  public  work,  it  will  usually  be  found  profitable 
in  the  end  to  have  the  very  best  legal  advice.  If  this  can- 
not be  supplied  by  the  official  attorney  of  the  corporation, 
special  counsel  should  be  employed  whenever  the  occasion 
requires. 

Unquestionably  the  most  important  city  official  in  the 
municipal  public  works  department  is  the  City  Engineer. 
Upon  his  ability  and  faithfulness  must  depend  in  a  large 
measure  the  proper  design  and  the  efficient  execution  of 
public  work,  and  therefore  great  care  should  be  exercised 
in  his  selection.  To  whatever  extent  politics  and  parti- 
sanship may  be  allowed  to  prevail  in  the  appointment  of 
other  city  officials,  they  should  be  rigidly  ignored  in  fill- 
ing the  office  of  City  Engineer.  The  writer  does  not 
wish  to  be  understood  as  condemning  in  general  the  intro- 
duction of  politics  into  city  government.  In  so  far  as 
political  parties  represent  well-defined  principles  and 
policies  in  the  conduct  of  public  affairs,  they  are  to  be 
encouraged.  It  is  only  through  organized  effort  that 
measures  of  public  policy  can,  as  a  rule,  be  carried  into 
effect,  and  as  it  is  not  usually  practicable  to  effect  a  sepa- 
rate organization  for  the  conduct  of  public  work  alone, 
the  best  results  must  continue  to  come,  as  they  have  here- 
tofore come,  from  utilizing  established  political  parties  for 
the  purpose.  But  the  practical  application  of  this  princi- 
ple has  its  limits,  and  the  line  should  be  sharply  drawn  at 
the  office  of  the  City  Engineer.     Principles  and  policies  of 


MUNICIPAL  ORGANIZATION  23 

public  improvement  having  been  decided  on,  politics 
should  have  nothing  to  do  with  their  execution.  Fitness 
for  the  position,  regardless  of  the  party  affiliations  of  the 
candidate,  should  alone  control  the  appointment.  It  may 
be  said  to  the  credit  of  city  engineers  that  as  a  rule  they 
are  not  active  political  partisans,  and  that  they  are  gov- 
erned in  their  conduct  by  duty  and  not  by  political  con- 
siderations. Furthermore,  the  position  should  not  be  sub- 
ject to  frequent  change  depending  upon  the  ascendancy  of 
one  or  the  other  political  party.  The  carrying  out  of  a 
definite  scheme  of  public  improvements  is  necessarily  the 
work  of  years,  and  the  City  Engineer  who  plans  and 
inaugurates  it  is,  other  things  being  equal,  most  compe- 
tent to  carry  it  to  completion.  He  becomes  familiar 
with  all  the  details  of  the  problems  involved,  and  has  the 
benefit  of  accumulating  experience  as  the  work  progresses. 
Frequent  changes  in  the  office  must  necessarily  introduce 
elements  of  inexperience  and  confusion,  and  may  interfere 
with  that  continuity  of  plan  and  purpose  and  interest 
which  are  essential  to  the  successful  carrying  out  of 
important  enterprises.  Among  the  most  efficient  and 
successful  city  engineers  will  be  found  many  who  have 
grown  up  in  the  office,  have  begun  in  a  very  subordinate 
position,  and  have  been  gradually  advanced  to  the  position 
of  chief.  Such  men  have  an  intimate  knowledge  of  facts 
and  details,  which  can  hardly  be  acquired  in  any  other 
way,  and  which  is  most  helpful,  if  not  absolutely  necessary, 
in  managing  the  affairs  of  the  office.  The  essential  quali- 
ties in  an  efficient  City  Engineer  are :  first,  absolute  honesty 
and  integrity,  supplemented  by  other  essentials  of  good 
character  that  will  merit  and  command  the  full  confidence 


24  MUNICIPAL   PUBLIC   WORKS 

of  his  official  associates  and  of  the  public  at  large ;  second,  a 
good  working  command  of  the  technical  knowledge  of  the 
profession,  supplemented  by  experience.  It  is  not  essen- 
tial that  he  shall  be  an  expert  or  a  specialist  in  any  one  or 
more  departments  of  municipal  engineering,  for  such  expert 
ability  can  be  obtained  through  and  is  the  special  prov- 
ince of  the  Consulting  Engineer,  of  whom  something  will 
be  said  further  on.  Third,  he  must  be  a  man  of  decisive 
character,  strong  will  power  and  persistence  of  purpose, 
having  a  large  endowment  of  that  quality  popularly 
known  as  "backbone."  The  man  who  is  lacking  in  these 
qualities,  who  is  vacillating  and  easily  swayed  by  this  and 
that  adverse  influence,  is  out  of  place  in  the  office  of  the 
City  Engineer,  whatever  other  good  qualities  he  may 
possess.  Fourth,  he  must  be  earnest,  active,  industrious, 
diplomatic,  and  devoted  to  his  work  and  to  the  interests 
of  the  city.  In  the  larger  cities,  where  the  engineering 
staff  is  necessarily  extensive,  the  duties  of  the  City  Engi- 
neer are  largely  administrative,  and  it  is  important  that  he 
be  a  man  of  good  executive  capacity. 

Having  secured  a  proper  man  for  the  position,  it  is 
essential  that  he  should  have  a  free  hand  in  dealing  with 
the  matters  that  belong  exclusively  to  his  department. 
First  of  all  he  should  select  and  nominate  all  his  assist- 
ants and  subordinates,  subject,  it  may  very  properly  be, 
to  the  approval  of  his  executive  superior,  whether  it 
be  the  City  Council,  or  the  Board  or  Commissioner  of 
Public  Works.  The  principle  of  undivided  responsibility 
in  the  administration  of  any  department  is  so  well  under- 
stood that  it  need  not  be  discussed  here.  The  City  Engi- 
neer should  be  held  to  a  strict  accountability  for  the  official 


MUNICIPAL   ORGANIZATION  25 

conduct  of  his  subordinates  and  the  efficient  management 
of  his  department.  But  this  would  be  manifestly  un- 
reasonable and  impossible,  unless  he  is  allowed  to  select 
his  staff  from  top  to  bottom.  Those  who  have  the  best 
opportunities  for  knowing  the  facts  will  confirm  the  asser- 
tion that  much  of  the  inefficiency  and  incompetency,  to 
say  nothing  of  more  serious  delinquencies,  that  are  some- 
times found  to  exist  in  the  engineering  department,  are 
due  in  a  large  measure  to  the  fact  that  assistants  and 
subordinates  are  forced  upon  the  City  Engineer  regardless 
of  their  fitness,  and,  being  so  appointed,  feel  that  they 
are  in  a  measure  independent  of  his  authority,  and  lack 
that  loyalty  to  him  which  is  an  absolute  essential  to  the 
proper  conduct  of  the  work  of  the  department. 

It  is  not  out  of  place  here  to  say  that  when  the  proper 
man  for  the  position  is  found,  he  should  be  paid  a  salary 
commensurate  with  the  character  and  importance  of  the 
work  he  is  expected  to  do.  It  is  a  fact,  not  very  credit- 
able to  municipal  government,  that  no  class  of  profes- 
sional men  are,  as  a  rule,  so  inadequately  paid  as  city 
engineers.  And  if  the  talent  found  in  that  office  is  often 
open  to  criticism,  it  is  largely  due  to  the  fact  that  the 
salary  paid  does  not  command  the  services  of  more  com- 
petent men.  If  able  and  efficient  city  engineers  are 
wanted,  they  are  readily  obtainable  if  adequate  compen- 
sation is  offered.  Considering  the  important  character 
and  the  financial  magnitude  of  the  work  they  are  to  man- 
age, and  the  diff'erence  in  economy  and  efficacy  that  may, 
and  often  does,  result  from  good  as  compared  with  bad 
engineering,  there  can  be  no  doubt  that  competent  en- 
gineering  is   cheap  at   any  price,  and   that  incompetent 


26  MUNICIPAL   PUBLIC  WORKS 

engineering  is   expensive  even   if   obtained  without   any 
compensation. 

The  employment  of  the  Consulting  Engineer  on  munici- 
pal public  work  is  not  as  common  as  it  should  be,  nor  as 
the  value  and  importance  of  his  services  would  justify. 
A  consulting  engineer  may  be  defined  as  a  member  of  the 
profession  whose  wide  experience  in,  or  exhaustive  study 
of,  one  or  more  departments  of  professional  work  renders 
his  counsel  or  advice  of  special  value  in  those  depart- 
ments. It  is  not  far  out  of  the  way  to  say  that  he  is  to 
the  engineering  profession  what  the  specialist  is  in  medi- 
cine, or  the  counsel  is  in  law. 

In  this  age  no  man  can  master  all  the  details  of,  or 
acquire  the  highest  degree  of  knowledge  and  skill  in, 
every  department  of  any  profession  or  business.  When 
an  engineer  has,  in  addition  to  marked  ability  and  a  wide 
experience,  devoted  himself  to  the  study  and  practice  of 
some  special  branch  of  the  profession,  it  must  be  evident 
that  his  judgment  and  skill  in  dealing  with  problems  in 
that  branch  are  sure  to  be  of  a  higher  order  and  of  more 
value  than  can  be  looked  for  in  the  ordinary  practitioner, 
whose  multiplicity  of  duties  limits  the  time  and  attention 
he  can  devote  to  any  one  special  subject.  The  average 
city  engineer  is  generally  burdened  with  more  work  than 
he  can  possibly  perform  with  that  care  and  thoroughness 
he  would  desire,  and  must  divide  his  time  and  attention 
between  the  problems  of  sewerage,  water  supply,  street 
paving,  street  lighting,  and  the  numerous  other  kinds  of 
municipal  work  that  fall  to  his  department.  It  would  be 
unreasonable  to  expect  him  to  bring  to  the  study  and  prac- 
tice of  any  one  of  these  things  the  knowledge  and  experi- 
ence of  the  specialist. 


MUNICIPAL   ORGANIZATION  27 

At  the  same  time  there  is  no  field  of  human  effort 
where  the  highest  skill  and  judgment  are  more  needed, 
or  where  more  may  be  accomplished  by  their  exercise, 
both  in  economy  and  efficacy,  than  in  these  problems  of 
municipal  public  improvement.  This  fact  is  not  always 
immediately  apparent,  because  errors  of  skill  and  judg- 
ment in  the  design  or  execution  of  public  work  may  pass 
unnoticed  for  years,  and  there  is  no  ready  method  of 
ascertaining  whether  a  certain  piece  of  work  miglit  have 
been  accomplished  by  more  economical  methods  without 
in  any  way  decreasing  its  value  or  utility.  Could  all  the 
facts  be  known  to  the  public,  the  necessity  and  the 
economy  of  securing  the  best  possible  expert  ability  on 
even  the  ordinary  everyday  work  of  the  average  city 
would  be  so  apparent  that  the  employment  of  the  Consult- 
ing Engineer  or  expert  would  become  the  rule  and  not 
the  exception.  This  is  a  strong  statement,  but  the  facts 
fully  justify  it.  It  is  not  intended  to  disparage  the  ability 
or  the  work  of  city  engineers,  the  most  competent  of 
whom  will  be  found  to  indorse  these  views  and  to  advo- 
cate most  strongly  the  wisdom  of  employing  special 
counsel  in  at  least  all  the  more  important  municipal 
enterprises. 

A  recent  illustration  of  this  fact  is  afforded  by  the 
example  of  a  large  city  engaged  in  a  work  of  great 
importance  —  the  chief  engineer  of  which  is  a  man  of 
very  high  reputation  and  ability  in  the  profession  —  where 
two  eminent  consulting  engineers  are  employed  on  a 
liberal  salary,  to  whom  all  the  important  questions,  and 
many  of  the  details  besides  are  submitted  for  examination 
and    approval.      Even    in   those   cases,   not   infrequent. 


28  MUNICIPAL   PUBLIC  WORKS 

where  tlie  chief  engineer  is  fully  the  equal  of  the  Con- 
sulting Engineer  in  competency  and  special  qualifica- 
tions, there  is  great  advantage  in  having  the  result  of 
their  combined  skill  and  judgment  in  all  important 
questions  that  may  arise.  No  man,  whatever  may  be 
his  ability  and  special  training,  is  infallible,  and  the 
fact  was  very  early  discovered  that  "in  a  multitude 
of  counsellors  there  is  wisdom."  Even  in  the  Supreme 
Court  of  the  United  States,  whose  members  represent 
the  highest  judicial  standard,  it  requires  the  concurrence 
of  more  than  one  judge  to  make  a  decision  effective.  It 
would  seem,  therefore,  to  be  a  wise  policy  on  the  part  of 
municipal  governments  to  resort  to  the  employment  of 
consulting  engineers  much  more  frequently  than  is  now 
the  practice.  A  retainer,  moderate  in  amount  as  com- 
pared with  the  value  of  the  results  attained  and  the 
money  that  might  be  saved,  would  secure  the  counsel 
of  competent  specialists  in  each  department  of  munici- 
pal work.  The  responsibility  that  must  be  assumed 
by  the  public  works  officials,  as  well  as  the  City  Engi- 
neer, in  planning  and  carrying  out  public  enterprises 
costing  large  sums  of  money,  is  necessarily  very  great, 
and  any  expedient  that  will  assist  them  in  discharging 
that  responsibility  should  be  welcome.  The  additional 
confidence  that  the  public  would  feel  in  plans  approved 
and  carried  out  under  the  advice  of  the  best  obtainable 
authority  on  the  subject,  would  often  be  of  material  ad- 
vantage, aside  from  the  personal  satisfaction  and  confi- 
dence it  would  afford  the  officials  themselves  in  bearing 
their  responsibilities. 

Little  need  Ijc  said  of  the  direct  assistants  of  the  City 


MUNICIPAL   ORGANIZATION  29 

Engineer;  their  employment  and  control  may  be  safely 
left  to  him. 

The  function  of  Inspector  on  public  work  is  a  very 
important  one.  He  is  supposed  to  be  the  immediate 
representative  of  the  City  Engineer,  and  therefore  of  the 
corporation,  in  seeing  that  work  is  done  in  accordance 
with  the  contract  and  with  the  instructions  of  the  City 
Engineer.  His  duties  are  of  the  first  importance.  Upon 
his  honesty,  watchfulness,  faithfulness,  and  loyalty  must 
necessarily  depend,  to  a  large  degree,  the  good  or  bad 
quality  of  the  work  done.  In  the  great  cities,  where  a 
large  amount  of  work,  scattered  over  a  wide  territory, 
is  in  progress,  it  is  obviously  impossible  for  the  City 
Engineer,  or  his  immediate  assistants,  to  visit  the  work 
very  frequently,  and  to  give  that  close  and  constant 
attention  that  is  usually  necessary. 

Notwithstanding  the  importance  of  their  duties,  it  is 
safe  to  say  that  no  class  of  city  employees  is  selected 
with  so  little  care  as  are  inspectors.  They  are  fre- 
quently appointed  by  the  council  or  the  mayor,  or  some 
other  city  official,  for  personal  or  political  reasons,  and 
with  little  or  no  regard  to  tlieir  special  fitness  for  the 
work  they  are  to  do.  It  is  not  even  very  unusual  for 
them  to  be  appointed  upon  the  suggestion  of  the  con- 
tractor, whose  object  is  not  always  to  protect  the  in- 
terests of  the  city.  When  so  appointed  they  can  hardly 
be  expected  to  be  wholly  devoted  to  securing  honest 
compliance  with  the  contract,  or  entirely  loyal  to  the 
engineer.  Perhaps  in  no  one  thing  is  the  usual  con- 
duct of  municipal  public  works  so  open  to  criticism  as 
in   the    appointment   and    control    of    inspectors.      The 


30  MUNICIPAL   PUBLIC   WORKS 

qualities  absolutely  necessary  in  an  inspector  of  pub- 
lic work  are,  first  of  all,  honesty  and  loyalty  to  the 
interests  of  his  employer ;  second,  a  thorough  practi- 
cal knowledge  of  the  particular  kind  of  work  he  is  to 
have  charge  of,  backed  by  a  good  supply  of  that  not 
overabundant  quality,  "  good,  hard  common  sense " ; 
and,  third,  industry  and  fidelity  in  attending  to  his 
duties.  How  far  the  average  inspector  on  municipal 
work  falls  short  of  these  standards  is  notorious  to  every 
contractor  and  to  most  city  engineers.  Too  often  he 
is  some  broken-down  politician  or  political  worker,  or 
gambler,  or  a  specimen  stick  from  the  driftwood  always 
floating  about  every  city,  who  has  failed  to  make  a 
living  in  any  other  way,  and  who  has  secured  his  posi- 
tion through  some  mysterious  "  pull "  with  the  appoint- 
ing officials.  He  is  "  on  the  make,"  and  blackmails  the 
contractor  shamelessly.  He  is  the  best  friend  of  the  dis- 
honest contractor,  and  does  not  hesitate  for  a  paltry  bribe 
to  overlook  or  to  wink  at  violations  of  the  contract,  which 
may  save  the  contractor  thousands  of  dollars,  but  may, 
eventually,  cost  the  city  ten  times  as  much. 

This  is  a  dark  picture,  but  it  is  only  an  outline,  and 
might  be  filled  in  with  details,  based  on  facts  in  the  per- 
sonal knowledge  of  most  contractors,  that  would  make  it 
appallingly  black.  It  is  not  asserted  that  all  inspectors 
on  public  work,  even  among  those  who  secure  their  ap- 
pointment by  questionable  methods,  are  incompetent  or 
dishonest,  but  those  who  have  had  most  experience  with 
city  public  work  will  bear  out  the  assertion  tliat  compe- 
tent, fearless,  and  honest  inspectors,  who  will  not  overlook 
defective  work  for  a  consideration,  are  in  a  liopeless  minor- 


MUNICIPAL   ORGANIZATION  31 

ity.  With  such  inspectors  over  public  work  being  done 
by  an  unscrupulous  contractor,  the  city  is  sure  to  be 
defrauded  to  the  extent  of  a  thousand  times  the  meagre 
pay  usually  allowed  this  class  of  employees. 

Inspectors  should  be  appointed  by,  and  be  subject  to, 
the  authority  of  the  City  Engineer  alone,  who  may  then 
be  held  responsible  for  their  official  action.  Knowing  the 
importance  of  their  work,  he  will  naturally  be  very  care- 
ful in  their  selection,  and  very  watchful  over  their  con- 
duct. As  a  rule  the  best  inspectors  come  from  the  ranks 
of  trained  mechanics  in  the  line  of  work  they  are  to  over- 
see. Thus,  other  things  being  equal,  a  well-trained  and 
skilful  mason  makes  the  best  inspector  over  masonry 
work.  His  practical  experience  enables  him  to  judge  of 
the  relative  importance  or  unimportance  of  details,  and 
to  insist  on  essentials  while  disregarding  the  small  things 
that  are  of  no  practical  importance.  The  practice  of 
employing  young  men  just  out  of  the  technical  schools 
cannot  be  recommended.  While  they  are  generally  faith- 
ful, watchful,  and  honest,  their  lack  of  practical  knowledge 
and  experience  places  them  at  a  great  disadvantage.  In 
their  commendable  zeal  to  secure  exact  conformity  to 
specifications,  they  are  likely  to  insist  on  technical  com- 
pliance with  unimportant  requirements,  under  conditions 
where  it  is  unnecessary  or  imjDracticable.  Their  lack  of 
practical  experience  does  not  enable  them  always  to  dis- 
criminate between  essentials  and  non-essentials,  or  between 
the  practical  and  the  impractical. 

The  writer  recalls  an  inspector  who  served  under  him 
many  years  ago,  on  a  very  important  and  rather  difficult 
piece  of  bridge  masonry.     He  was  a  man  of  more  than 


32  MUNICIPAL   PUBLIC   WORKS 

average  mental  calibre  and  of  great  good  sense.  He  was 
by  trade  a  mason  and  a  thorough  master  of  his  business, 
and  knew  perfectly  the  qualities  of  material  and  the  kind 
of  work  necessary  to  turn  out  a  good  job.  He  compre- 
hended the  character  of  work  the  specifications  were 
intended  to  secure,  and  knew  what  requirements  it  was 
necessary  to  enforce  under  all  conditions,  and  what  might, 
under  unforeseen  circumstances,  be  varied  from,  without 
detriment  to  the  work.  While  not  a  mere  stickler  for 
technical  adherence  to  every  clause  of  the  specifications, 
he  insisted  on  every  essential  requirement.  With  the 
confidence  of  a  master  of  his  business,  absolutely  honest, 
and  at  the  same  time  reasonable  and  diplomatic,  he  was 
respected  and  obeyed  by  contractor  and  workman  alike. 
His  inventive  mind  and  practical  knowledge  enabled  him 
to  make  many  valuable  suggestions  in  the  management  of 
the  work,  and  thus  to  be  of  real  assistance  to  the  contrac- 
tor, who  came  to  regard  him  as  a  friend  rather  than  as  an 
enemy.  Such  inspectors  are,  unfortunately,  not  often 
found,  but  they  furnish  an  ideal  standard  to  be  approached 
as  nearly  as  may  be. 


CHAPTER  III 

PREPARATIONS  FOR  MUNICIPAL  WORK 

Projects  for  municipal  public  work  should  be  care- 
fully worked  out,  and  all  necessary  preliminary  prepara- 
tions therefor  made  with  deliberation  and  thoroughness. 
Hasty  and  inadequate  preparation  is  often  responsible 
for  the  trouble,  vexation,  and  excessive  cost  that  so  fre- 
quently attend  the  prosecution  of  such  work.  Ill-con- 
sidered plans  will  often  be  hurriedly  offered  to  accomplish 
some  purpose,  or  to  meet  some  public  emergency,  which, 
upon  careful  and  mature  examination,  will  be  found  to 
afford  an  unsatisfactory  or  inadequate  solution  of  the 
problems  to  be  solved.  Projects  will  be  proposed  under 
the  guise  of  public  utility  and  pressed  for  hasty  approval, 
which  will  appear,  when  carefully  examined,  to  be  largely 
schemes  for  private  gain.  Some  necessary  improvement 
may  have  been  deferred  until  an  emergency  seems  to 
make  it  important  to  proceed  with  the  work,  without 
giving  the  matter  the  careful  preliminary  investigation 
essential  to  its  success.  These  and  many  other  condi- 
tions may  arise  to  tempt  city  officials  to  hasty  and  ill- 
considered  action,  but  the  temptation  should  be  resolutely 
resisted  until  the  necessary  investigations  can  be  made 
and  the  plans  developed.  Emergencies  which  require 
immediate  action  should  be  provided  for  by  temporary 
measures  until  permanent  plans  for  relief  can  be  perfected. 
D  33 


34  MUNICIPAL   PUBLIC  WORKS 

This  is  a  much  wiser  course  than  to  saddle  the  munici- 
pality with  imperfect  and  unsatisfactory  public  works, 
constructed  at  great  expense,  which,  once  installed,  must 
be  put  up  with  for  a  long  term  of  years.  One  result 
of  precipitate  action  is  to  deprive  the  engineering  de- 
partment of  the  time  and  opportunity  necessary  for  work- 
ing out  in  the  proper  manner  the  solution  of  problems 
involved,  for  studying  their  cost,  and  for  preparing  esti- 
mates of  that  cost  which  will  prove  approximately  cor- 
rect. A  striking  illustration  of  this  was  afforded  by  the 
action  of  the  legislature  of  the  state  of  New  York  in 
ordering  improvements  amounting  to  the  practical  re- 
construction of  the  state  canals,  and  appropriating  a 
large  sum  of  money  therefor,  upon  estimates  of  the  state 
Engineer  and  Surveyor  which  he  was  compelled  to  make 
from  insufficient  data  and  within  an  altogether  inadequate 
time.  As  might  have  been  anticipated,  these  estimates 
proved  to  be  erroneous  and  misleading.  They  were 
really  not  entitled  to  be  called  estimates  at  all,  being 
rather  rude  guesses,  based  upon  supposed  conditions. 
The  lessons  of  that  misadventure  are  so  fresh  in  the 
mind  of  every  one  that  it  is  unnecessary  to  enlarge  upon 
them  here.  The  appropriation  was  exhausted  before 
the  contemplated  work  was  more  than  half  done,  the 
work  was  suspended,  the  air  was  full  of  charges  of  fraud 
and  scandal,  reputations  were  smirched,  and  the  state 
was  involved  in  lingering  and  expensive  efforts  to  cancel 
and  settle  up  uncompleted  contracts.  Investigation  failed 
to  sustain  the  charges  of  fraud  and  corruption,  and  the 
real  and  only  serious  wrong-doing  in  tlie  transaction 
seems  to  have  been  the  inexcusable  haste  and  unprepared- 


PREPARATIONS   FOR  MUNICIPAL  WORK  35 

ness  with  which  this  project  to  expend  many  millions  of 
dollars  was  entered  upon.  It  is  not  too  much  to  say 
that  such  examples  are  common  in  the  history  of  many 
cities,  though  on  a  smaller  scale. 

The  public  and  many  city  officials  do  not  seem  to 
understand  or  realize  that  the  proper  preparation  of  any 
project  for  public  improvement  requires  considerable  time 
for  the  necessary  preliminary  work.  There  is  nearly 
always  more  than  one  solution  for  problems  of  municipal 
improvement,  and  much  latitude  for  varying  details  when 
the  general  solution  has  been  arrived  at ;  and  time  and 
opportunity  should  be  given  for  working  these  out  in 
the  best  manner.  For  these  reasons  any  project  for 
public  work  should  be  inaugurated  as  long  in  advance 
as  possible,  so  as  to  give  ample  opportunity  for  mature 
consideration  and  preparation. 

Early  consideration  should  be  given  to  the  means  by 
which  -the  money  is  to  be  provided  to  meet  the  expense 
of  contemplated  improvements.  The  funds  to  pay  for 
municipal  public  work  are  raised  in  a  variety  of  ways, 
the  principal  ones,  in  the  order  of  their  common  use, 
being :  the  sale  of  municipal  bonds ;  special  assessments ; 
and  ordinary  taxation. 

The  method  of  issuing  bonds  has  much  to  recommend 
it  if  kept  within  proper  bounds.  It  enables  the  corpora- 
tion to  raise  means  quickly  to  carry  out  needed  improve- 
ments, and  with  a  proper  sinking  fund  provision  the 
burden  may  be  distributed  over  a  considerable  period  of 
time,  so  that  it  will  not  be  seriously  felt  by  the  public. 

The  improvements  made  with  the  proceeds  of  the  sal6  of 
bonds  should  be,  and  usually  are,  of  a  permanent  character, 


36  MUNICIPAL  PUBLIC  WORKS 

and  the  benefits  will  extend  over  a  considerable  period  of 
years,  during  which  the  population  and  taxable  values  are 
likely  greatly  to  increase,  making  the  burden  lighter,  and 
compelling  those  who  come  after  the  completion  of  the 
work  and  enjoy  its  benefits  to  participate  in  paying  for 
it.  But  the  method  is  also  attended  with  dangers.  If 
the  corporation  enjoys  high  credit  and  its  bonds  can  be 
readily  sold  for,  or  above,  their  par  value,  there  is  danger 
that  the  ease  with  which  funds  may  thus  be  provided 
may  encourage  unnecessary  or  reckless  expenditures  to 
an  extent  that  may  seriously  cripple  the  credit  and  pros- 
perity of  the  municipality  in  the  future,  by  rendering  the 
burdens  of  taxation  excessive.  The  provision  in  most 
states  that  the  bonded  debt  may  never  exceed  a  stated 
percentum  of  the  total  assessed  valuation  for  taxation,  is 
a  very  wise  and  salutary  one,  but  it  is  often  evaded  on 
various  pretexts.  The  temptation  to  overload  the  munici- 
pality with  bonded  indebtedness  is  greatly  increased  by 
the  fact  that  the  burden  of  meeting  it  is  shifted  from  the 
present  to  the  future,  and  need  not  greatly  worry  the 
taxpayers  of  the  present.  The  only  safe  course  is  to  re- 
strict the  issue  of  bonds  rigidly  within  limits  which 
experience  has  shown  to  be  prudent. 

In  prescribing  a  limit  for  the  amount  of  bonded  indebt- 
edness which  a  municipal  corporation  may  incur  it  is, 
however,  desirable  and  proper  to  discriminate  between 
actual  indebtedness  which  must  ultimately  be  met  by 
ordinary  taxation  and  that  class  of  indebtedness,  or 
rather  investment,  for  which  a  means  of  liquidation 
is  provided  independent  of  ordinary  taxation.  Thus, 
if    a    city   has    incurred    a    debt   to   construct   its   own 


PKEPARATIONS  FOR  MUNICIPAL  WORK  37 

water-supply  plant,  which  it  operates  under  its  direct 
control,  collecting  for  the  service  water  rates  which 
yield  sufficient  revenue,  not  only  to  pay  all  operating 
expenses,  but  to  meet  the  interest  on  the  debt  created 
for  construction,  and  to  set  aside  a  sinking  fund  that 
mil  extinguish  the  debt  when  it  falls  due,  that  debt 
may,  with  reasonable  safety,  be  excluded  from  con- 
sideration in  any  legislative  act  limiting  the  indebted- 
ness of  the  corporation.  In  the  same  way  indebtedness 
created  by  issuing  bonds  to  meet  immediate  payments 
for  work  the  cost  of  which  will  ultimately  be  paid 
from  special  assessments  should  not  be  considered  as 
augmenting  the  real  indebtedness  of  the  corporation 
in  so  far  as  these  special  assessments  may  be  counted 
upon  as  being  sure  of  collection.  In  this  case,  how- 
ever, it  is  well  to  err  on  the  safe  side,  as  such  assess- 
ments are  subject  to  some  contingencies,  and  it  is  safest 
to  consider  that  a  part,  at  least,  of  them  will  fail  of 
collection. 

It  must  be  remembered,  however,  that  fortuities  may 
occur  in  the  best  planned  and  most  promising  projects, 
through  the  operation  of  which  responsibility  for  the 
debt  incurred  may  be  thrown  back  upon  the  taxpayers, 
and  that,  therefore,  such  obligations  should  not  be  in- 
curred without  very  careful  consideration  and  prudent 
provision  for  contingencies. 

The  method  of  raising  funds  by  special  assessments  is 
of  so  much  importance,  and  the  principles  involved  so 
imperfectly  understood  by  the  public  and  many  munici- 
pal officers,  that  a  separate  chapter  will  be  devoted  to 
that  subject. 


38  MUNICIPAL   PUBLIC   WORKS 

A  popular  and  meritorious  method  of  providing  the 
means  for  carrying  out  some  kinds  of  public  work  con- 
sists in  a  combination  of  the  bond  and  the  special  assess- 
ment plans. 

The  immediate  cost  of  work  which  may  properly  be 
paid  for  by  special  assessments  is  met  by  the  issue  and 
sale  of  bonds  for  that  specific  work,  running  for  a  limited 
period  of  years.  The  total  sum  chargeable  to  any  tax- 
payer by  special  assessment  is  divided  into  as  many  equal 
sums  as  the  bonds  run  in  years,  and  one  of  these  sums, 
together  with  a  sum  sufficient  to  meet  his  share  of  the 
interest,  is  collected  from  the  taxpayer  annually  in  the 
same  manner  as  other  taxes  are  collected,  the  liability  thus 
created  against  the  assessed  property  being  made  a  first 
lien  upon  it,  ordinary  taxes  alone  taking  precedence. 
The  money  thus  realized  is  either  applied  directly  to  the 
purchase  of  an  allotment  of  the  bonds,  or  is  placed  in  a 
sinking  fund  for  taking  up  the  bonds  at  maturity,  so  that 
the  temporary  debt  assumed  by  the  municipality  is  met 
and  extinguished  without  cost  or  serious  inconvenience  to 
it.  By  this  plan  most  of  the  advantages  of  each  method 
are  realized,  and  the  objections  to  each  are  mostly  avoided, 
since  the  courts  have,  I  believe,  usually  held  that  bonded 
indebtedness  of  this  character  should  not  be  included  in 
determining  the  bonding  limit  of  the  municipality. 

The  most  serious  danger  in  the  employment  of  this 
system  arises  from  the  possibility  that  taxpayers  thus 
specially  assessed  may  successfully  contest  the  validity 
of  the  special  assessments  on  various  grounds,  in  which 
case  the  municipality  is  left  to  bear  the  burden  of  redeem- 
ing the  bonds.     A  conspicuous   example  was  afforded,  a 


PREPARATIONS  FOR  MUNICIPAL   WORK  39 

few  years  ago,  by  the  very  disastrous  experience  of  cer- 
tain New  Jersey  cities,  where  miles  of  unnecessary  pave- 
ment had  been  constructed,  the  cost  being  assessed  against 
the  abutting  property,  but  directly  paid  for  from  the 
proceeds  of  bonds  issued  for  the  purpose.  The  property 
owners  successfully  contested  the  assessments,  and  the 
result  was  the  forced  bankruptcy  of  the  municipalities. 
Many  cities  have  thus  been  forced  to  assume  heavy  finan- 
cial burdens,  and  the  lesson  such  cases  teach  should  not 
go  unheeded.  Where,  however,  proper  prudence  and 
caution  are  exercised,  the  percentage  of  defaulted  pay- 
ments on  special  assessments  should  not  be  greater  than 
upon  ordinary  taxes.  Various  devices  to  escape  this  con- 
tingency have  been  resorted  to  in  different  cities,  such  as  : 
that  the  city  shall  be  held  liable  for  payment  of  the  bonds 
to  the  extent  only  of  the  receipts  from  special  assessments; 
that  the  contractor  for  the  improvement  shall  be  paid  in 
these  bonds  and  shall  look  to  the  collection  of  the  special 
assessments  alone  for  their  redemption ;  that  the  corpora- 
tion shall  issue,  in  lieu  of  bonds,  in  payment  for  the  work, 
certificates  of  indebtedness  against  the  property  or  the 
taxpayer  benefited  ;  and  other  provisions  of  like  nature. 
Such  provisions  serve  only  to  shift  the  responsibility  for 
the  collection  of  the  assessments  from  the  municipality 
to  some  one  else,  usually  the  contractor,  who  in  turn,  as 
compensation  for  the  risks  thus  taken,  adds  what  he 
deems  a  safe  insurance  to  his  price  for  doing  the  work, 
thus  in  turn  reshifting  the  obligation  to  the  shoulders  of 
the  municipality  or  the  taxpayers.  It  is,  therefore,  very 
important,  where  special  assessments  are  to  be  imposed, 
that  the   very  greatest   care   shall  be  taken   to   provide 


40  MUNICIPAL  PUBLIC  WORKS 

against  any  possible  loophole  through  which  the  person 
assessed  may  escape  payment.  Where  for  any  reason 
there  is  room  for  doubt  or  uncertainty  upon  this  point, 
it  is  better  to  discard  the  method  altogether,  and,  if  nec- 
essary, to  postpone  indefinitely  the  carrying  out  of  the 
work. 

Other  things  being  equal,  the  safest  and  best  method  of 
providing  means  to  pay  for  public  work  is  from  the  gen- 
eral funds  raised  by  taxation  in  the  ordinary  way.  Where 
this  is  done  the  credit  of  the  municipality  cannot  be 
impaired,  and  the  temptation  to  reckless  and  unnecessary 
expenditure  is  almost  certain  to  be  effectually  resisted. 
But  unfortunately  the  "  other  things "  alluded  to  are 
usually  not  equal,  and  it  is  found  impracticable  to  carry 
out,  efficiently,  systems  of  public  improvement  where  cur- 
rent taxation  must  be  depended  upon  to  meet  the  cost 
of  them.  One  condition  of  carrying  out  in  the  most 
ejficient  and  economical  manner  any  large  public  work  is 
that  it  shall  be  prosecuted  consecutively  as  a  whole,  and 
completed  without  unnecessary  delay,  and  this  is  usually 
impossible  where  the  municipality  must  depend,  for  means 
of  payment,  on  funds  available  from  ordinary  general 
taxation.  Where  the  greater  part  of  the  cost  of  the 
improvement  may  be  met  by  special  assessments,  the 
municipality's  share  may  be  paid  from  the  general  funds; 
but  it  remains  true,  as  a  general  proposition,  that  it  is 
impracticable  to  depend  on  ordinary  taxation  for  the 
means  of  prosecuting  public  work.  Wherever  it  is 
found  practicable,  however,  it  is  without  doubt  the  safest 
and  most  prudent  plan  to  follow,  and  should  be  adhered 
to  if  possible. 


PREPARATIONS  FOR   MUNICIPAL  WORK  41 

Wherever  any  public  municipal  improvement  is  con- 
templated, its  plan  and  scope  should  be  carefully  studied. 
Assuming  that  its  necessity  and  utility  are  fully  demon- 
strated, and  that  the  means  for  carrying  it  out  can  be 
provided,  it  remains  to  consider  how  the  object  aimed  at 
may  be  best  and  most  economically  attained,  the  present 
and  future  interest  of  the  public  conserved,  the  special 
conditions  that  may  exist  be  met,  the  best  general  plan 
selected,  and,  finally,  the  necessary  details  worked  out. 
It  is  very  desirable  that  a  general  scheme  of  public 
improvements  should  be  planned,  if  possible,  before  the 
separate  portions  of  it  are  laid  out.  Thus,  the  streets  of 
a  city  must,  in  addition  to  their  special  function  as 
avenues  of  communication,  be  utilized  for  carrying  sewers, 
water  mains,  electrical  conduits,  street  railroad  tracks,  etc., 
and  if  a  general  scheme  for  the  relative  location  of  these 
various  things  can  be  adopted  at  the  beginning  and  pro- 
vision be  made  for  them,  a  great  deal  of  trouble  and 
expense  may  be  avoided  as  the  development  progresses. 
In  our  rapidly  growing  American  cities  it  is  often  difficult 
to  foresee  and  provide  for  the  requirements  of  the  future  ; 
but  it  is  often  possible  to  design  works  needed  at  the  pres- 
ent time  in  such  a  manner  that  they  will  become  harmo- 
nious parts  of  the  larger  systems,  which  the  growth  and 
development  of  the  city  may  make  necessary  in  the  future. 
It  is  too  often  the  case  that  the  present  temporary  require- 
ments alone  are  considered  and  provided  for,  and  when 
extensions  and  enlargements  become  necessary  the  older 
work  must  be  modified  or  entirely  discarded  and  recon- 
structed. This  cannot  alwa3^s  be  avoided,  but  might  be 
in  many  cases,  if  proper  foresight  were  exercised. 


42  ^MUNICIPAL   PUBLIC  WORKS 

In  planning  projects  for  public  works,  the  experience 
of  other  cities  where  similar  problems  have  been  worked 
out  should  be  investigated.  In  this  way  very  valuable 
information  may  be  obtained.  It  is  a  maxim  of  syste- 
matic inventors  that  when  a  new  or  improved  device  or 
process  is  contemplated  the  first  thing  to  be  done  is  to 
investigate  "the  state  of  the  art,"  —  to  find  out  what 
has  already  been  done  or  attempted  in  that  particular 
field.  If  city  ofiicials  were  careful  to  pursue  the  same 
plan  in  devising  public  works,  the  public  would  be  greatly 
benefited,  and  some  costly  mistakes  would  be  avoided. 
Time  and  money  spent  in  such  investigation  is  always 
well  invested.  The  practice  of  sending  committees  to 
other  cities  to  study  their  improvements  and  methods 
deserves,  therefore,  to  be  encouraged.  Unfortunately, 
the  public  usually  looks  with  disfavor  upon  these 
"junketing  expeditions,"  as  they  are  popularly  called. 
While  it  is  undeniable  that  in  too  many  cases  these  visit- 
ing trips  have  been  undertaken  for  pleasure  rather  than 
for  serious  study,  and  that  the  visitors  have  been  enter- 
tained rather  lavishly  by  their  hosts,  the  popular  preju- 
dice against  them  is  neither  warranted  in  theory  nor 
justified  in  practice.  The  fact  that  such  visits  may, 
and  too  often  do,  degenerate  into  little  more  than  junk- 
ets is  not  a  valid  argument  against  their  general  utility. 
When  undertaken  with  the  proper  motive  and  carried  out 
in  a  proper  manner,  they  nearly  always  yield  valuable 
results,  worth  to  the  municipality  far  more  than  they 
cost.  The  ideal  city  official  must  keep  abreast  of  the 
best  theory  and  practice  in  municipal  business,  and  par- 
ticularly in  that  department  of  it  for  which  he  may  be 


PREPARATIONS   FOR  MUNICIPAL  WORK  43 

more  directly  responsible,  and  in  visiting  and  studying 
the  methods  of  other  cities  he  will  be  sure  to  pick  up 
items  of  information  that  can  be  utilized  to  the  advan- 
tage of  his  own  work. 

In  this  connection  the  societies  or  associations  of  city 
officials,  a  number  of  which  have  been  organized  in  this 
country,  cannot  be  too  highly  commended.  They  are 
doing  a  very  valuable  work,  and  should  be  heartily 
encouraged  and  sustained  by  every  municipal  corporation. 
Their  conventions  and  transactions  have  created  a  spirit 
of  investigation  and  emulation,  and  have  done  more 
towards  the  elevation  of  the  plane  of  civic  standards 
than  any  other  single  agency.  The  papers  and  discus- 
sions that  come  before  the  meetings  and  are  printed  in 
the  transactions  are  a  storehouse  of  data  and  experience 
of  the  greatest  value.  These  meetings  bring  into  personal 
contact  the  most  earnest  and  able  men  from  all  depart- 
ments of  municipal  government,  who  compare  notes, 
exchange  ideas,  and  discuss  results.  The  value  of  the 
intellectual  and  moral  stimulus  resulting  from  such 
personal  contact  and  association  cannot  be  overesti- 
mated. 

It  is  trite  to  say  that  public  work  should  be  planned 
and  executed  upon  the  same  principles  that  a  careful, 
wise,  and  far-seeing  business  man  applies  to  his  personal 
business.  The  questions  that  the  prudent  business  man 
will  consider  when  any  addition  to  his  business  or  his 
plant  is  contemplated  are :  Does  there  exist  a  necessity 
for  the  proposed  expenditure?  Have  I,  or  can  I  procure 
on  reasonable  terms,  the  means  to  carry  out  the  proposed 
improvement  ?    If  I  must  borrow  the  required  money,  can 


44  MUNICIPAL   PUBLIC  WORKS 

I  pay  the  debt  when  the  loans  mature  ?  Will  the  proposed 
improvement  answer  the  purpose  for  which  it  is  intended  ? 
And,  finally,  —  the  crucial  question,  —  Will  it  pay? 

The  necessity  for  a  proposed  public  work  is  usually 
sufficiently  apparent.  The  necessities  of  every  city  are 
quite  certain  to  outrun  the  ability  to  meet  them.  The 
financial  resources  and  the  state  of  the  credit  of  the  city 
will  afford  an  answer  to  the  second  question.  The  third  re- 
quires much  more  careful  consideration,  though  it  usually 
receives  less  than  either  of  the  others.  Judging  from 
the  action  of  the  average  city  council,  one  is  forced  to  con- 
clude that  the  question  of  how  a  bonded  debt  incurred  for 
public  work  is  to  be  met  when  it  matures  gives  very  little 
concern.  There  is,  it  is  true,  some  excuse  for  this  uncon- 
cern, because  the  prosperity  and  rapid  growth  of  our 
American  towns  and  cities  tends  to  make  it  comparatively 
easy  to  meet  such  obligations  when  they  fall  due ;  and  if 
for  any  reason  it  is  not  convenient  to  pay  off  bonds  when 
they  mature,  it  is  nearly  always  possible  to  refund  them  on 
favorable  terms.  It  therefore  usually  happens  that  if  the 
bonded  indebtedness  of  a  municipal  corporation  is  kept 
within  reasonable  grounds,  little  difficulty  is  found  in 
taking  care  of  the  debt  when  it  falls  due.  It  is  hardly 
necessary  to  say,  however,  that  such  careless  disregard 
of  what  are  admitted  to  be  sound  business  principles  is 
not  good  public  policy.  Prudent  financiering  demands 
that  Avhenever  a  debt  is  created,  provision  for  meeting 
that  debt  when  it  matures  shall  be  simultaneously  enacted. 
The  usual  and  most  satisfactory  way  of  doing  this  is  to 
establish  a  sinking  fund,  so  adjusted  that  it  will  amount 
to  a  sufficient  sum  when  the  debt  matures  to  pay  it  off. 


PREPARATIONS  FOR  MUNICIPAL  WORK  45 

Not  only  is  the  creation  of  such  a  sinking  fund  dictated 
by  prudence,  but  it  will  usually  be  found  profitable. 
Notwithstanding  the  high  credit  enjoyed  by  our  Amer- 
ican municipal  corporations,  even  where  their  indebted- 
ness is  secured  only  by  the  business  honor  of  the 
corporation,  that  credit  would  be,  and  the  facts  prove 
that  it  always  is,  enhanced  by  the  knowledge  that  pro- 
vision is  being  systematically  made  to  meet  all  obliga- 
tions when  they  mature.  Bonds  backed  by  the  creation 
of  an  adequate  sinking  fund  will  nearly  always  sell  for 
a  price  sufficiently  higher  than  they  would  otherwise 
bring  to  make  the  creation  of  the  sinking  fund  profitable 
as  well  as  prudent.  Another  thing  in  its  favor  is  the  fact 
that  the  necessity  of  supporting  the  sinking  fund  from 
current  taxation  tends  to  hold  in  check  the  reckless 
issue  and  sale  of  bonds  for  extravagant  public  works. 
When  a  temporary  debt  is  created,  to  be  taken  up  from 
the  proceeds  of  special  assessments  within  a  limited  time, 
a  sinking  fund  is,  of  course,  unnecessary;  but  in  all  other 
cases  where  bonds  are  issued,  they  should  be  secured 
by  the  creation  of  a  sinking  fund,  which  should  be  held 
inviolate  for  its  intended  purpose.  A  common  objection 
to  sinking  funds  is  that  their  operation  places  an  undue 
burden  on  present  taxpayers,  but  this  need  not  be  so, 
since  payments  to  the  fund  may  be  arranged  on  a  sliding 
scale,  beginning  with  easy  contributions  and  gradually 
increasing  in  the  anticipated  ratio  of  the  growth  and 
wealth  of  the  corporation. 

The  question,  "  Will  a  public  improvement  pay  ?  "  can- 
not be  considered  in  quite  the  same  way  as  a  business  man 
would  apply  it  to  an  addition  to  his  business  plant.     The 


46  MUNICIPAL  PUBLIC  WORKS 

business  man  would  reason  on  the  basis  of  prospective 
commercial  profits  alone,  while  the  construction  of  a  pub- 
lic work  often  involves  the  supplying  of  some  necessity  or 
convenience  of  the  population  the  value  of  which  is  not 
exactly  measurable  in  commercial  terms.  It  is  rather 
analogous  to  the  necessary  expenditure  the  business  man 
must  make  to  supply  the  physical  requirements  of  him- 
self and  his  family.  In  this  aspect  the  question  becomes, 
"  Is  the  expenditure  justified  by  the  existing  necessities  ?  " 
rather  than,  "  Will  it  yield  a  profit  ?  "  In  the  final  analysis, 
however,  both  questions  mean  practically  the  same  thing. 
The  necessities  of  existence  must  be  supplied  in  order  that 
a  man  or  a  municipal  corporation  may  be  successful  and 
prosperous,  and  in  this  sense  necessary  expenditure,  pro- 
vided it  is  actually  necessary,  must  be  profitable.  But 
the  popular  standard  of  necessity  is  elastic,  being  measured 
by  habit,  and  by  the  ability  to  supply  what  is  regarded  as 
necessary.  Consequently,  there  is  room  for  quite  a  wide 
difference  of  opinion  as  to  the  necessity,  and  the  conse- 
quent advisability  of  any  certain  public  work,  and  the 
question  of  whether  it  will  pay  to  carry  it  out  will  depend 
on  one's  opinion  of  the  urgency  of  the  necessity.  If  the 
contemplated  public  work  involves  questions  of  human 
life  and  health,  its  urgency  should  be  considered  very 
great.  If,  for  instance,  the  water  supply  of  a  city  is 
polluted  and  it  can  be  reasonably  predicted  that  the  pro- 
curement of  a  supply  of  pure  water  would  materially 
prevent  sickness  and  reduce  the  death-rate  among  the 
inhabitants,  the  expenditure  of  the  money  necessary  to 
improve  the  water  supply  will  be  justified  not  only  upon 
humane  grounds,  but  by  sound  business  principles. 


PREPARATIONS  FOR  MUNICIPAL  WORK  47 

There  are,  however,  not  a  few  public  improvements  to 
which  the  commercial  standard  of  utility  and  profit  may- 
be directly  applied,  and  their  advisability  judged  thereby. 
Street  pavements  are  an  example.  Whatever  aesthetic 
arguments  may  be  presented  in  favor  of  paving  a  street, 
the  real  question  is  whether  it  will  pay  as  an  investment. 
For  country  roads  through  very  thinly  settled  regions,  a 
proposition  to  pave  the  roadways  would  be  in  the  highest 
degree  absurd.  All  that  the  business  transacted  over 
them  will  warrant  is  the  cutting  down  of  the  trees  and 
the  removal  of  stumps.  As  the  country  becomes  more 
densely  populated,  and  travel  and  traffic  increase,  the 
farmer  finds  it  profitable  to  drain  and  grade  the  roadway, 
because  he  can  then  haul  heavier  loads  and  make  better 
time.  A  still  further  increase  of  traffic  makes  a  well-con- 
structed macadam  roadway  desirable,  because,  principally, 
it  is  found  profitable.  In  the  larger  towns  and  smaller 
cities  something  better  than  the  macadam  is  warranted, 
because  the  volume  of  travel  is  such  that  it  pays  to  reduce 
still  further  the  expenses  of  street  transportation.  In  the 
heavy-travelled  business  streets  of  the  larger  cities  the 
aggregate  economy  resulting  from  reducing  the  resistance 
to  drawing  heavy  loads  makes  the  best  and  smoothest 
pavements  profitable,  even  if  they  are  very  expensive  to 
construct  and  maintain.  When  it  is  considered  that  one 
horse  will  draw  over  a  good  asphalt  pavement  a  load  that 
it  would  require  at  least  two  horses  to  haul  over  a  good 
macadam  road,  it  is  not  difficult  to  realize  that  the  one 
may  be  a  much  more  profitable  investment  than  the  other, 
even  if  the  first  cost  of  the  one  is  two  or  three  times  that 
of  the  other.    The  same  reasoning  applies  to  the  reduction 


48  MUNICIPAL   PUBLIC   WORKS 

of  gradients  on  roads  and  streets.  The  hill  that  it  would 
not  pay  to  cut  down  on  streets  or  roads  where  the  travel  is 
light,  becomes  such  a  serious  obstacle  to  heavy  city  travel 
that  a  very  large  sum  of  money  may  be  profitably  spent 
to  reduce  the  grade.  So  with  the  water  supply  of  a 
city.  The  present  source  may  be  so  located  that  expen- 
sive pumping  is  required  to  deliver  it  into  the  city  mains ; 
or  it  may  be  so  impure  that  it  cannot  be  safely  used 
without  filtration.  It  may  be  possible,  by  the  expenditure 
of  a  sufiicient  sum  of  money,  to  obtain  a  supply  that  will 
flow  by  gravity  into  the  mains,  and  be  so  pure  that  it  will 
not  require  treatment,  and  the  saving  in  cost  of  operation 
may  be  so  considerable  that  the  additional  expenditure 
for  the  new  supply  may  be  a  very  profitable  investment. 
These  examples  might  be  extended  to  embrace  all  the 
several  branches  of  municipal  public  works,  but  what  has 
been  said  will  sufficiently  illustrate  what  is  meant  by  the 
the  question,  "  Will  it  pay  ? "  as  applied  to  the  public 
works  of  a  city.  It  is  a  question  that  should  always  be 
carefully  considered.  Each  particular  case  will  often  re- 
quire separate  and  individual  examination,  and  the  ser- 
vices of  technical  experts  may  often  be  required  to  deal 
with  it  adequately ;  but  until  it  is  demonstrated  that  some 
pressing  necessity  will  be  met,  or  that  the  expenditure  re- 
quired will  be  profitably  invested,  the  improvement  will 
not  be  justified.  Of  course  there  may  be  reasons  other 
than  necessity  or  direct  prolit  of  sufficient  weight  to  jus- 
tify a  public  improvement,  or  the  benefits  derived  may  be 
indirect,  but  nevertheless  real.  Thus  works  of  art,  public 
monuments,  or  public  i)arks  and  gardens  may  have  a 
sufficient  value  fully  to  warrant  their  existence.     Street 


PREPARATIONS   FOR  MUNICIPAL  WORK  49 

improvements  may  be  extended  beyond  the  point  where 
they  are  really  necessary  or  profitable  at  the  time,  if  there 
is  reasonable  assurance  that  new  industrial  establishments 
or  increased  population  will  be  attracted,  thus  building  up 
the  business  of  the  city,  and  increasing  the  receipts  from 
taxes. 

It  must  be  kept  in  mind  that  public  improvements  are 
undertaken  for  the  good  of  the  public  at  large,  and  not 
to  confer  benefits  on  individuals  alone.  In  nearly  every 
community  there  will  be  found  persons,  or  associations 
of  persons,  who,  largely  from  selfish  motives,  clamor,  in 
the  name  of  the  public,  for  improvements  which,  while 
not  devoid  of  public  utility,  would  mainly  benefit  the 
property  of  a  few  individuals.  If  in  such  cases  the  in- 
terests of  the  public  justify  the  improvement,  the  property 
of  the  individuals  benefited  should  be  specially  assessed 
for  a  fair  part  of  the  cost.  If  this  were  more  generally 
done,  city  officials  would  be  less  frequently  importuned  to 
carry  out  projects  of  doubtful  public  utility. 

When  the  general  scheme  for  any  improvement  has 
been  decided  upon,  general  plans  and  details  and  specifi- 
cations are  to  be  prepared.  These  come  within  the  prov- 
ince of  the  engineering  department,  and  need  not  be 
enlarged  upon  here.  It  should  be  remembered  by  his 
ofiicial  associates  that  the  City  Engineer  will  require  ample 
time  for  the  preparation  of  his  part  of  the  work.  Usually 
each  project  will  present  some  special  features  and  some 
engineering  difficulties  which  will  require  time  to  con- 
sider and  work  out.  Often  special  surveys  and  examina- 
tions must  be  made,  systematic  observations  conducted 
which   to   be   of   value   must    extend    over   considerable 


50  MUNICIPAL   PUBLIC   WORKS 

periods  of  time,  and  experiments  may  be  necessary  to 
determine  the  fitness  of  materials  available  for  the  work. 
The  success  or  failure  of  the  project  may  depend  upon 
the  care  with  which  this  preliminary  work  is  done,  and  no 
pains  should  be  spared  to  make  it  as  thorough  and  com- 
plete as  possible.  Improvements  to  be  made,  errors  to 
be  corrected,  contingencies  to  be  foreseen,  and  estimates 
to  be  revised  are  much  more  easily  and  cheaply  worked 
out  in  the  office  and  on  the  drawing  table  than  on  the 
ground  after  the  work  is  in  progress.  It  almost  never 
pays,  as  a  mere  matter  of  business,  however  great  may  be 
the  urgency,  unduly  to  crowd  this  part  of  the  work. 


CHAPTER   IV 
DIRECT  WORK    VS.   CONTRACT  WORK 

Public  works  may  be  constructed,  operated,  and  main- 
tained either  under  the  direct  control  and  management 
of  the  municipality  or  by  contract.  Under  the  first  plan 
the  agents  of  the  municipality  not  only  design  the  work, 
and  prepare  the  specifications  under  which  it  is  to  be 
carried  out,  but  they  purchase  the  required  materials  and 
employ  and  control  directly  the  labor  engaged  upon  the 
work,  without  the  intervention  of  contractors.  It  may 
be  called  the  direct  system.  In  the  second,  when  all 
preliminary  preparations  are  completed,  proposals  are 
asked  for  from  contractors,  some  one  of  the  proposals  is 
accepted,  a  contract  is  entered  into,  and  the  contractor 
supplies  the  materials  and  furnishes  and  directs  the  labor 
upon  the  work,  the  corporation  exercising  only  general 
control  over  it  to  see  that  it  is  done  in  accordance  with 
the  contract.     This  is  known  as  the  contract  system. 

The  relative  advantages  and  disadvantages  of  the  two 
systems  have  always  been  and  still  are  a  fruitful  source  of 
discussion.  On  the  one  hand  it  is  claimed  that  by  the 
direct  system  work  should  be  done  not  only  in  a  better 
manner,  but  more  economically  than  under  the  contract 
system.  On  the  other  hand  it  is  argued  that,  because 
of  unavoidable  conditions,  the  work  can  be  done  equally 

51 


52  MUNICIPAL   PUBLIC  WOEKS 

as  well,  and,  in  the  end,  more  cheaply,  by  the  contract 
system. 

Unfortunately,  the  results  of  experience  with  the  two 
systems  are  quite  inconclusive,  when  closely  and  fairly 
examined.  Considerable  public  work  has  been  carried 
on  in  American  cities  under  the  direct  system,  and  it 
has  often  been  claimed  that  a  material  saving  in  cost 
has  resulted.  Such  claims  may  or  may  not  be  true,  but 
as  a  rule  they  cannot  be  satisfactorily  verified.  The 
conditions  that  affect  the  cost  of  any  two  pieces  of  public 
work  are  seldom,  if  ever,  exactly  the  same,  and  conse- 
quently they  cannot  be  rigorously  compared  with  each 
other.  The  reasons  for  this  are  too  numerous  to  mention, 
but  the  fact  will  be  apparent  to  any  one  who  gives  the 
matter  close  examination.  Furthermore,  it  can  never  be 
quite  certain  that,  even  assuming  that  the  conditions  were 
identical,  the  work  in  the  one  case  was  done  with  exactly  the 
same  adherence  to  plans  and  specifications,  and  was  of  the 
same  quality,  as  in  the  other.  Nor  can  it  always  be  deter- 
mined whether  the  accounts  of  cost  have  been  kept  on  the 
same  basis,  or  whether  all  the  items  of  the  cost  have  been 
charged  to  the  work  in  each  case.  It  nearly  always  occurs 
that  where  two  pieces  of  public  work,  apparently  quite 
alike  in  all  respects,  have  been  executed  under  the  same 
management,  —  whether  of  a  contractor  or  of  the  munici- 
pality, —  the  result  will  disclose  a  considerable  variation 
both  in  the  total  cost,  and  in  the  unit  cost  of  the  different 
items  of  the  work.  It  is  therefore  not  difficult  to  account 
for  tlie  contradictory  statements  of  the  advocates  of  either 
system.  Any  disinterested  person  who  will  attempt  to 
collect  the  existing  data  on  the  subject,  and  to  deduce 


DIRECT  WORK   VS.  CONTRACT  WORK  53 

therefrom  conclusive  evidence  that  one  or  the  other 
system  is  the  more  economical,  will  find  the  problem  at 
present  practically  insoluble. 

In  the  absence  of  conclusive  proof  derived  from  experi- 
ence, we  are  thrown  back  upon  a  theoretical  discussion  of 
the  subject,  supplemented  by  such  practical  data  as  are 
available. 

The  claim  that  the  municipality  should  be  able  to  carry 
out  its  public  works  under  the  direct  system  as  well  as, 
and  with  greater  economy  than,  under  the  contract  system 
is  very  plausible.  It  is  argued  that  the  officers  of  the 
municipality,  having  no  personal  financial  interest  at  stake, 
can  have  no  other  motive  than  to  execute  the  work  in  the 
proper  manner,  and,  other  things  being  equal,  it  must  be 
evident  that  the  municipality  should  be  able  to  save 
the  contractor's  profit.  The  argument  is  sound,  but  the 
assumption  of  equal  conditions  is  delusive.  It  is  not  by 
any  means  always  true  that  the  municipal  officials  charged 
with  carrying  out  the  work  are  entirely  free  from  personal 
incentives  to  reduce  the  cost  at  the  expense  of  the  quality 
of  the  work,  and  the  "  other  things  "  assumed  to  be  equal 
are,  as  a  matter  of  fact,  never,  or  almost  never,  equal. 

Granting  that  the  officials  charged  with  carrying  out 
the  work  are  entirely  honest,  and  actuated  only  by  a  de- 
sire to  serve  the  best  interests  of  the  municipality,  there 
will  always  be  a  strong  incentive,  quite  proper  in  itself, 
to  reduce  the  cost  to  the  lowest  possible  limit.  The 
motive  for  this  may  not  be  free  from  personal  consider- 
ations. The  official  is  naturally  ambitious  to  establish 
a  reputation  for  economical  management  and  for  doing 
the  work  at  a  lower  cost  than  prevailing  contract  prices. 


54  MUNICIPAL   PUBLIC   WORKS 

and  he  may  be  unconsciously  influenced  to  secure  these 
results  by  modifying  plans,  and  permitting  a  quality  of 
work  below  the  standard  originally  intended,  arguing 
that  it  is  good  enough  for  the  purpose.  Those  who 
have  observed  the  progress  of  public  works  that  are 
being  carried  out  under  the  direct  system  will  bear 
evidence  to  the  assertion  that  this  is  not  only  often,  but 
that  it  is  generally  the  case.  It  is  not  putting  the 
matter  too  strongly  to  say  that  work  executed  under  the 
direct  system  is  generally  carried  on  with  a  less  strict 
adherence  to  the  precise  requirements  of  the  plans  and 
specifications  than  would  be  exacted  from  a  contractor. 
If  any  one  doubts  this  let  him  make  a  careful  ex- 
amination of  any  such  work  that  may  come  under  his 
observation.  Whether  the  work  is  or  is  not  good 
enough  for  the  purpose  intended,  is  hardly  the  ques- 
tion. If  in  designing  the  work  and  preparing  the 
specifications  with  the  view  of  having  it  done  by  con- 
tract, certain  requirements  were  thought  essential,  these 
requirements  cannot  be  less  essential  when  the  munici- 
pality may,  later,  decide  to  do  the  work  itself.  Even 
when  the  municipal  officials  intend  to  and  do  make  every 
effort  to  execute  the  work  in  strict  accordance  with  the 
standard  called  for  by  the  specifications,  they  may  find 
it  impracticable  or  impossible  to  do  so.  They  may  not 
be  supplied  with  the  plant  necessary  to  turn  out  the 
quality  of  work  intended,  they  may  not  be  able  to  com- 
mand the  skilled  labor  necessary,  and  they  may  not 
have  had  the  practical  experience  in  directing  the  use 
of  machinery  and  labor  that  is  essential  to  produce  the 
Ijcst  results.      Whatever  may  be  the  reason,  it  may  be 


DIRECT   WORK   VS.   CONTRACT  WORK  55 

stated  as  a  fact,  without  impugning  the  motives  or  the 
ability  of  municipal  officials,  that  public  work  done  under 
the  direct  system  does  not  average  better  in  quality  than 
similar  work  done  under  the  contract  system. 

It  will  usually  occur  that  while  the  contractor,  even  of 
the  better  class,  may  be  tempted  to  reduce  the  cost  at  the 
expense  of  the  quality  of  the  work,  the  municipal  officials, 
having  no  direct  interest  whatever  in  the  financial  out- 
come, will  insist  on  strict  adherence  to  the  terms  of  the 
specifications,  so  that  the  quality  of  the  work  secured  is 
likely  to  be  at  least  as  good  as  though  the  city  were  doing 
the  work  direct. 

It  would  therefore  seem  to  be  a  reasonable  conclusion 
that  under  the  direction  of  competent  and  alert  city  offi- 
cials as  good  work  can  be  secured  by  the  contract  system 
as  by  the  direct  system,  while  under  incompetent  and  neg- 
ligent officials  good  work  is  not  likely  to  be  secured  under 
either  system. 

Nor  will  the  claim  that  greater  economy  can  be  secured 
under  the  direct  system  bear  close  examination.  It  is 
generally  true  that  the  successful  bidder  upon  any  public 
work  is  a  contractor  of  large  experience  in  that  particular 
kind  of  w^ork,  who,  as  a  result  of  that  experience,  has 
acquired  more  than  ordinary  skill  in  its  prosecution.  His 
survival  in  the  business  indicates  that  he  has  the  natural 
or  acquired  executive  capacity  successfully  to  manage 
work  of  that  character.  He  is  probably  equipped  with 
the  best  plant  for  the  service,  and  is  likely  to  have  at  his 
ready  command  competent  overseers  and  the  necessary 
skilled  labor.  If  he  does  not  fulfil  these  requirements,  it 
would  be  unwise  to  award  to  him  the  contract.     Further- 


66  MUNICIPAL  PUBLIC  WORKS 

more,  contracting  for  profit  being  his  business,  he  will  give 
to  the  work  that  close  and  exclusive  attention  necessary 
to  secure  the  best  financial  results.  On  the  other  hand  it 
will  usually  occur  that  the  city  official,  as,  for  instance, 
the  City  Engineer,  who  would  have  charge  of  the  prosecu- 
tion of  the  work  under  the  direct  system,  has  been  selected 
with  a  view  to  his  professional  ability  rather  than  his 
familiarity  with,  or  his  executive  capacity  in  the  practical 
management  of,  construction  work  ;  but  granting  that  he 
is  fully  qualified  in  this  respect,  his  other  duties,  which 
are  usually  exacting  and  require  the  whole  of  his  time, 
will  prevent  him  from  giving  to  the  work  that  close  and 
undivided  attention  necessary  to  insure  the  highest  econ- 
omy. Even  if  he  possesses  all  the  necessary  qualifications 
and  has  ample  time  to  devote  to  the  work,  he  will  labor 
under  serious  disadvantages  which  the  contractor  would 
escape.  He  may  be  hampered  by  laws  and  ordinances,  or 
by  the  opposition  of  other  officers  whose  approval  is  nec- 
essary, in  securing  promptly  the  required  plant  of  the 
proper  character.  It  is  a  well-known  fact,  the  causes  for 
which  we  need  not  stop  to  investigate,  that  laborers  in 
the  employ  of  municipal  corporations  are  not  only  less 
efficient,  but  that  they  often  command  higher  wages  than 
those  employed  by  contractors  or  private  corporations. 
It  is  difficult  in  the  present  condition  of  municipal  govern- 
ment to  keep  public  work  under  city  management  free 
from  personal  or  political  influence,  and  city  officials  often 
feel  themselves  obliged  to  employ  or  to  retain  foremen 
and  laborers  whom  they  well  know  to  be  incompetent  and 
inefficient.  They  are  often  impelled,  for  a  like  reason,  to 
purchase  supplies  from  certain  dealers  although  they  could 


DIRECT  WORK   VS.   CONTRACT  WORK  57 

do  better  in  price  and  quality  elsewhere.  It  will  often 
occur  that  however  ably  the  work  may  be  managed  in 
other  respects,  the  loss  through  these  causes  will  exceed 
the  profit  a  contractor  would  be  able  to  make  upon  the 
work. 

The  item  of  accidents  and  damages  is  one  that  must  be 
taken  into  consideration  in  municipal  work.  There  is  a 
class  of  people  who  are  conscienceless  in  the  matter  of  de- 
frauding government.  They  will  trump  up  claims  against 
the  municipality  that  they  would  not  think  of  attempting 
to  collect  from  a  contractor,  and  the  average  jury  is  more 
liberal  in  awarding  damages  against  municipal  or  other 
corporations  than  against  private  persons. 

The  fact  is  not  overlooked  that  public  work  by  the 
direct  system  has  usually  been  undertaken  as  a  temporary 
measure,  under  some  special  conditions  which  seemed,  at 
the  time,  to  make  it  necessary.  It  is  not  to  be  doubted 
that  if  a  municipal  corporation  should  deliberately  deter- 
mine to  do  all  its  work,  or  at  least  all  work  of  one  partic- 
ular class,  as  for  instance  the  construction  of  sewers,  by 
the  direct  system,  and  should  equip  itself  with  the  best 
appliances  for  the  purpose,  and  should  place  the  manage- 
ment in  the  hands  of  specialists  whose  whole  time  and 
attention  would  be  given  to  it,  better  results  could  be 
reached  than  have  been  common  where  isolated  pieces  of 
work  have  been  carried  out  under  the  management  of  city 
officials  whose  other  duties  occupied  most  of  their  time. 
But  even  then  some  of  the  adverse  conditions  referred  to 
above  would  not  be  avoided.  It  would  seem  therefore  to 
be  a  reasonable  conclusion,  when  all  the  facts  are  taken 
into  consideration,  that  municipal  public  work  cannot  be 


68  MUNICIPAL  PUBLIC  WORKS 

carried  out  by  the  direct  system  more  economically  than 
by  the  contract  system.  Perhaps  the  strongest  and  most 
convincing  evidence  of  the  truth  of  this  conclusion  is 
found  in  the  fact  that  in  a  large  majority  of  the  cases 
where  the  direct  system  has  been  tried  it  has  sooner  or 
later  been  abandoned  for  economical  reasons,  and  the  con- 
tract system  resumed.  There  are,  however,  not  a  few  ex- 
ceptions to  the  rule,  notably  in  the  operation  of  water 
works  and  lighting  plants,  but  in  these  cases  success  has 
probably  been  due  to  the  fact  that  the  work  has  been 
done  by  a  specially  organized  department  under  the  direct 
manasrement  of  a  skilled  liead,  whose  whole  time  has  been 
devoted  to  it.  These  special  cases  seem  to  point  out  the 
only  way  in  which  work  can  be  successfully  conducted  by 
the  direct  system.  If  for  any  reason  it  is  deemed  best 
that  public  work  shall  be  carried  on  directly  by  the  munici- 
pality, special  and  systematic  arrangement  for  its  man- 
agement should  be  made.  No  regular  official  burdened 
with  other  duties  should  be  expected  or  required  to  assume 
direct  control  and  management  of  such  special  work.  It 
being  hardly  possible  that  isolated  pieces  of  any  kind  of 
work  can  be  economically  done  under  the  direct  system,  it 
would  seem  advisable,  if  the  corporation  is  to  embark  in 
the  business  at  all,  that  it  should  undertake  all  the  work 
of  some  one  kind,  and  make  deliberate  and  systematic 
preparation  therefor.  A  suitable  equipment  of  plant 
should  be  procured,  and  a  competent  and  experienced 
superintendent  should  be  employed,  who  should  be  required 
to  organize  the  work  and  to  nominate  his  assistants,  and 
he  should  then  be  held  responsible  for  the  conduct  of  his 
employees  and  for  the  proper  and  economical  management 


DIRECT  WORK   VS.   CONTRACT  WORK  59 

of  the  work.  In  these  respects  he  should  be  regarded  as 
taking  the  place  of  the  contractor,  and  should  be  held  to 
as  strict  a  compliance  with  plans,  specifications,  and  gen- 
eral instructions  as  a  contractor  would  be.  This  would 
make  it  necessary  to  place  inspectors  over  the  work,  and 
the  same  careful  supervision  should  be  exercised  by  the 
City  Engineer's  department  as  if  the  work  were  being 
done  by  contract.  Under  such  a  system  responsibility 
would  be  undivided,  and  the  best  results  should  be  se- 
cured, both  as  to  the  quality  of  the  work  and  the  economy 
attained.  In  no  other  way,  it  is  believed,  can  municipal 
corporations  hope  to  carry  out  improvements  by  the  direct 
system  with  satisfactory  results. 


CHAPTER   V 

ADVERTISING,  OPENING  BIDS,  AND  AWARDING 
CONTRACTS 

All  the  necessary  preliminary  preparations  for  the 
construction  of  a  public  work  having  been  completed, 
the  next  step  —  assuming  that  the  work  is  to  be  done 
by  contract  —  will  be  to  ask  for  proposals  from  con- 
tractors. Proposals  are  usually  invited  by  advertising 
to  that  effect  in  the  newspapers  and  technical  periodi- 
cals. The  proper  preparation  of  these  advertisements 
is  not  so  simple  a  matter  as  might,  at  first  thought, 
be  supposed.  Such  advertisements  may  be  divided  into 
two  general  classes.  Brevity  is  the  chief  characteristic 
of  the  one,  which  merely  states  that  proposals  for  a  cer- 
tain work  will  be  received  up  to  a  stated  date  and  hour, 
and  that  plans  and  specifications  may  be  seen,  and  bid- 
ding blanks  and  necessary  information  obtained  at  a 
given  address.  The  other  class  gives  in  more  or  less 
detail  the  general  character  of  the  work  to  be  done, 
the  approximate  quantities  of  the  more  important  items, 
the  time  witliin  which  the  work  must  be  completed,  and 
the  amount  and  character  of  the  bond  required.  The 
additional  cost  of  the  longer  advertisement  is  usually 
small,  and  it  is  always  to  be  preferred  if  wide  compe- 
tition is  desired.  The  fuller  information  enables  the 
non-resident   contractor  to   judge   of   the  character  and 

60 


ADVERTISING  AND   AWARDING  CONTRACTS      61 

magnitude  of  the  work  involved,  and  the  time  and 
capital  it  will  require  ;  and  it  will  often  attract  bidders 
from  a  distance  who,  in  the  absence  of  such  information, 
would  not  go  to  the  trouble  and  expense  of  visiting  the 
locality  to  obtain  it.  Ample  time  should  be  allowed  be- 
tween the  date  of  publication  of  the  advertisement  and 
that  upon  which  bids  are  to  be  opened,  to  enable  pros- 
pective bidders  to  visit  and  examine  the  locality  and 
the  work,  collect  the  data  necessary  to  figure  costs  in- 
telligently and  deliberately,  and  to  make  such  prelimi- 
nary arrangements  for  capital  and  plant  as  prudence 
may  dictate.  It  is  a  great  mistake,  particularly  when 
work  of  considerable  magnitude  and  complexity  is  in- 
volved, to  allow  contractors  insufficient  time  to  prepare 
their  proposals.  If  they  are  compelled  to  make  up  and 
submit  bids  upon  insufficient  data  and  without  mature 
consideration,  the  more  prudent  on  the  one  hand  will 
naturally  aim  to  name  prices  with  a  wide  margin  for 
safety,  while  the  more  reckless  may,  upon  the  spur  of 
the  moment,  submit  figures  so  low  that  they  will  not 
be  able  to  carry  out  the  work  if  it  is  awarded  to  them. 
In  either  case  the  corporation  is  likely  to  be  the  loser  to 
a  greater  or  less  extent. 

The  time  necessary  Avill,  of  course,  depend  upon  the 
character  and  magnitude  of  the  work  and  other  condi- 
tions, and  the  engineer  in  charge  will  be  able  to  deter- 
mine the  proper  allowance,  provided  he  be  not  unduly 
pressed  to  shorten  the  period  by  impatient  city  officials. 

For  the  benefit  of  prospective  bidders  and  the  protec- 
tion of  the  corporation,  the  conditions  under  which  pro- 
posals will  be  received,  considered,  and  acted  upon  should 


62  MUNICIPAL  PUBLIC  WORKS 

be  made  public.  These  are  usually  printed  at  the  head 
of  the  blank  bidding  sheet  prepared  for  the  use  of  bidders. 
The  usual  conditions  imposed  are  familiar  to  the  public, 
and  need  not  be  detailed  here.  Proposals  submitted 
which  do  not  conform  to  these  conditions  are  said  to 
be  informal ;  and  it  is  customary,  particularly  in  the 
larger  cities,  to  reject  them.  They  should  always  be 
rejected  unless,  as  is  sometimes  the  case,  the  right  is 
reserved  in  the  published  conditions  to  waive  infor- 
malities. Even  where  this  is  done  it  is  generally 
unwise  to  admit  informal  bids  to  competition.  The 
object  of  these  conditions  and  of  the  printed  forms 
of  proposals,  is  that  all  bids  presented  may  be  in  the 
same  form  and  upon  the  same  basis,  so  that  they  may 
be  intelligently  compared.  This  may  be  quite  impossi- 
ble if  some  of  them  are  informal.  Furthermore,  the  ad- 
mission of  informal  or  incomplete  proposals  may  be, 
and  usually  is,  unfair  and  unjust  to  other  bidders, 
and,  whether  justly  or  not,  may  expose  the  city  officials 
to  charges  of  unfairness,  or  worse,  by  those  other  bid- 
ders and  the  public.  Thus,  if  the  time  for  comple- 
tion named  in  the  conditions  is  one  year,  and  if  one 
of  the  bidders  demands,  instead,  thirteen  months ; 
or  if  one  bid  stipulates  that  certain  requirements  of 
the  specifications  shall  be  modified  or  that  the  terms 
of  payment  be  changed,  his  proposal  cannot  be  fairly 
compared  with  the  others  who  bid  strictly  in  accord- 
ance witli  the  prescribed  terms.  It  would  be  mani- 
festly unfair  to  the  others  to  admit  the  informal  bid, 
since  these  others,  if  allowed  to  make  the  same  modi- 
fication, miglit  be  able  to  name  lower   prices.     It  may 


ADVERTISING  AND   AWARDING   CONTRACTS      63 

often  seem  a  hardship  to  reject  proposals  because  of 
unimportant,  and  perhaps  unintentional,  irregularities; 
but  if  informalities  are  admitted  at  all,  it  may  be  diffi- 
cult or  impossible  to  draw  the  line  between  those  that 
are  important  and  those  that  are  not,  or  to  convince 
bidders  of  the  importance  of  one,  and  the  unimportance 
of  another  informality.  It  is,  therefore,  best  strictly  to 
enforce  the  published  conditions,  and  rigidly  to  reject  all 
proposals  that  are  informal. 

It  is  usual  and  proper  to  require  that  the  bidder  shall 
submit  with  his  proposal  a  guaranty  that  if  the  contract 
shall  be  awarded  to  him  he  will  accept  it  and  will  enter 
into  the  formal  agreement  within  a  specified  time.  This 
guaranty  may  be  a  bond  with  sufficient  sureties,  or  what 
is  preferable,  a  sum  of  money,  or  a  certified  check.  The 
amount  of  this  guaranty  should  not  be  excessive.  It 
may  reasonably  be  made  sufficient  to  reimburse  the  munici- 
pality for  any  direct  losses  that  the  bidder's  failure  or 
refusal  to  enter  into  contract  may  entail  upon  it,  such  as 
the  expenses  of  re-advertising  and  making  a  new  award. 
It  may  possibly  be  made  sufficiently  large  to  cover  any 
difference  between  the  aggregate  sum  of  the  defaulting 
bidder's  proposal  and  that  at  which  the  work  may  have 
to  be  awarded  upon  re-advertising,  but  the  wisdom  of 
attempting  to  do  this  is  questionable,  and  it  may  be 
illegal  unless  coupled  with  the  condition  that  the  default- 
ing bidder  shall  be  credited  with  amounts  saved  in  case 
the  re-letting  results  in  a  contract  more  favorable  to  the 
corporation.  The  amount  should  never  be  fixed  with  the 
view  of  having  it  cover  punitive  damages. 

It  is  prudent  and  not  unreasonable  to  require  that  the 


64  MUNICIPAL  PUBLIC   WORKS 

guaranties  of  all  the  bidders  shall  be  held  until  the  award 
is  made  and  a  contract  entered  into,  but  not  longer. 
That  of  the  successful  bidder  as  well  as  of  the  others 
should  be  surrendered  when  the  contract  is  finally  exe- 
cuted. The  practice,  occasionally  followed,  of  stipulating 
that  the  guaranty  of  tlie  successful  bidder  shall  be  held 
until  some  subsequent  time,  as,  in  some  instances,  until 
the  completion  of  the  work,  is  unreasonable  and  unwar- 
ranted. The  contract  itself  is  supposed  to  provide  amply 
against  its  forfeiture,  and  the  retaining  of  the  bidder's 
guaranty  may  prove  very  unjust.  Thus,  the  state  of 
New  York,  when  contracting  for  the  improvement  of  the 
Erie  Canal  a  few  years  ago,  stipulated  that  bidders  should 
submit  with  their  proposals  a  large  cash  guaranty,  which 
in  the  case  of  the  one  to  whom  a  contract  might  be  awarded 
was  to  be  held  until  the  completion  of,  and  the  final  settle- 
ment for  the  work.  The  state  itself  forfeited  a  large 
number  of  these  contracts,  and  held  the  bidding  guar- 
anties of  the  contractors  for  years  until  settlement  was 
effected,  refusing  to  pay  more  than  two  per  cent  interest 
upon  the  large  sums  thus  withheld  from  the  unfortunate 
contractors. 

The  condition  reserving  the  right  to  reject  any  or  all 
bids  should  always  be  present,  even  where  the  laws  seem 
to  require  that  the  work  shall  be  awarded  to  the  lowest 
bidder ;  and  whenever  it  is  at  all  possible,  the  right  to 
select  the  most  advantageous  bid,  whether  lowest  or  not, 
should  be  fully  and  fearlessly  exercised.  The  failure 
wisely  and  intelligently  to  exercise  this  privilege,  whether 
such  failure  is  due  to  legal  proliibition  or  to  fear  of 
adverse   criticism,  is  the   principal  cause  of  the  present 


ADVERTISING  AND   AWARDING  CONTRACTS      65 

demoralized  condition  of  the  business  of  contracting  for 
public  work.  If  city  officials  were  left  free  to  exercise, 
and  did  exercise,  their  best  business  judgment  in  award- 
ing contracts,  in  the  same  manner  and  to  the  same  extent 
as  do  private  persons  and  business  corporations,  the  wide 
difference  that  now  exists  between  the  standard  of  con- 
tractors upon  municipal  public  work  and  that  of  contrac- 
tors upon  the  work  of  private  persons  or  corporations 
would  largely  disappear,  and  the  effect  would  soon  be 
apparent,  both  in  the  quality  of  work  secured  and  its 
lower  ultimate  cost.  This  subject  will  be  further  dis- 
cussed in  another  chapter. 

No  proposals  for  public  work  should  be  admitted  after 
the  time  named  has  expired,  and  those  received  should  be 
opened  immediately  after  the  expiration  of  that  time. 
Unless  this  be  done,  suspicious  bidders  may  have  oppor- 
tunity, if  not  cause,  to  charge  that  the  delay  is  for  im- 
proper purposes.  For  the  same  reason  bids  should  always 
be  opened  and  read  aloud  in  public,  and  recorded  in  a 
book  kept  for  the  purpose,  by  an  official  clerk.  Pro- 
posals when  received  should  be  considered  and  acted  upon 
without  unnecessary  delay.  If  for  no  other  reason,  this 
is  due  to  those  who  have  submitted  them,  since,  until 
the  award  is  made,  they  may  not  be  able  safely  to  make 
other  engagements.  Where,  as  is  the  case  in  too  many 
places,  the  contract  must  be  let  to  the  lowest  bidder  or 
all  bids  must  be  rejected,  the  making  of  the  award  is 
comparatively  simple,  and  too  often  the  principal  ques- 
tion to  be  considered  and  decided  is  whether  it  is  better 
to  award  the  work  to  an  unfit,  or  questionable  contrac- 
tor, with  the  certainty  of  trouble  ahead,  or  to  reject  all 


G6  MUNICIPAL  PUBLIC   WORKS 

bids  and  incur  the  expense  and  loss  of  time  consequent 
upon  readvertisement,  witli  the  prospect  of  being  con- 
fronted by  the  same  conditions  when  the  second  lot  of 
proposals  are  opened. 

Where,  however,  the  law  permits  the  persons  charged 
with  making  the  award  to  exercise  their  discretion  and 
judgment  in  choosing  from  the  bids  submitted  the  one 
that  in  their  opinion  it  will  be  for  the  best  interests 
of  the  corporation  to  accept,  they  should  perform  their 
duty  without  regard  to  the  clamor  of  the  public  or  the 
complaints  of  disappointed  bidders.  There  is  every 
reason  why  they  should,  and  no  valid  or  sufficient  reason 
why  they  should  not,  exercise  the  same  discrimination 
and  judgment  in  conducting  the  business  of  the  cor- 
poration as  the  prudent  business  man  does  in  his  pri- 
vate business.  Until  municipal  officials  are  not  only 
left  free  to  do  this,  but  are  held  responsible  for  doing 
it,  and  for  the  way  in  which  they  do  it,  we  can  hope  for 
little  in  the  way  of  reform  in  municipal  contracting. 

Aside  from  the  expense  and  delay  that  readvertise- 
ment for  proposals  must  involve,  there  are  objections  to 
it  which  may  be  worth  considering.  It  does  not  always 
occur  that  better  or  lower  prices  are  named  in  the  sec- 
ond lot  of  bids  than  in  the  first.  When  the  first  lot  of 
proposals  liave  been  opened  and  the  prices  named  made 
public,  the  better  class  of  contractors  object,  and  not 
without  reason,  to  a  readvertisement,  since  their  figures 
being  known  to  their  competitors,  the  latter,  particularly 
if  tliey  belong  to  the  unscrupulous  class,  can  so  frame 
their  second  bids  as  to  secure  the  work,  regardless  of 
suitable  prices,  being  willing   to  take   their   chances   of 


ADVEETISING  AND   AWARDING  CONTRACTS       67 

making  a  profit  by  devious  methods.  Not  infrequently 
the  more  desirable  contractors  will  decline  to  submit  a 
second  bid  under  such  circumstances.  And  while  the 
readvertisement  may  call  out  lower  prices,  it  may  be 
very  doubtfid  whether,  in  the  end,  any  real  economy 
will  result. 

It  is  important  that  advertisements,  conditions  of  bid- 
ding, bidding  sheets  and  all  documents  connected  there- 
with shall  be  so  clear  and  definite  that  no  opportunity 
for  misinterpretation  or  misunderstanding  can  occur. 
These  documents  usually  become,  later,  parts  of  the 
contract,  and  they  should  be  prepared  with  the  same 
scrupulous  care  as  the  agreement  itself.  Furthermore, 
where  these  fjfipers  are  vague  or  incomplete,  they  may 
not  be  clearly  apprehended  by  bidders  and  informal 
proposals  may  result. 

Above  all,  every  act  connected  with  the  advertise- 
ment, the  receiving  of  proposals,  and  the  award  of  con- 
tracts should  be  of  such  a  character  as  to  leave  no 
room  for  charges  of  injustice  or  unfairness  by  disap- 
pointed bidders  or  their  friends.  Officials  cannot  hope 
always  to  escape  such  charges,  but  they  may  by  clear 
and  explicit  conditions  and  the  greatest  possible  pub- 
licity in  dealing  with  proposals  received,  place  them- 
selves in  a  position  effectually  to  refute  them. 


CHAPTER    VI 

THE  CONTRACT 

If  public  work  is  to  be  clone  under  the  contract  system, 
the  proper  preparation  of  the  contract  becomes  a  matter  of 
much  importance.  Strictly  speaking,  the  contract  is  the 
document  which  records  the  agreement  between  the  cor- 
poration and  the  contractor,  but  since  the  plans  and 
specifications  for  the  work  embraced  in  the  agreement, 
the  proposal  upon  which  it  is  based,  and  the  bond  to 
secure  compliance  with  the  agreement  are  usually  referred 
to  in,  and  specifically  made  a  part  of,  the  contract,  all  these 
parts  are  usually  spoken  of  as  together  forming  "  the 
contract."  The  object  of  the  contract  is  to  record,  as 
definitely  and  fully  as  may  be  necessary,  the  understand- 
ing between  the  municipality  and  the  contractor.  If  the 
language  of  the  contract  be  obscure  or  indefinite,  or  if  it 
fail  to  cover  all  essential  details,  or  if  one  part  of  it,  as 
the  plans,  conflict  with  another  part  of  it,  as  the  specifica- 
tions, misunderstandings  and  disagreements  are  liable  to 
arise  between  the  municipality  and  the  contractor  which 
may  give  much  trouble  and  may  greatly  delay  the  progress 
and  completion  of  the  work  and  complicate  the  settle- 
ment therefor. 

The  preparation  of  the  plans  and  specifications  belong 
among  the  duties  of  the  engineer  ;  the  drawing  of  the 
contract  and  bond,  among  those  of  the  legal  adviser  of 

68 


THE   CONTRACT  69 

the  corporation,  the  members  of  the  legislative  branch 
of  a  city  not  usually  being  expected  to  assist  in  their 
preparation.  It  is  not  within  the  province  of  this  book 
to  instruct  the  engineer  and  the  city  attorney,  but,  with- 
out encroaching  on  their  professional  domain,  the  non- 
professional city  official,  or  citizen,  may  consider  the 
broad  principles  that  underlie  the  law  of  contracts,  and 
may  often  be  of  material  service  in  preparing  or  intelli- 
gently criticising  contracts  in  which  they  may  be  interested.^ 
Indeed,  barring  certain  formal  requirements,  the  intelli- 
gent layman  may  be  quite  as  competent  to  frame  or  dis- 
cuss an  agreement  as  his  lawyer.  To  say  this  is  not  to 
disparage  the  special  ability  or  skill  of  the  professional 
man,  or  to  intimate  that  his  services  are  not  always 
necessary.  The  idea  is,  however,  quite  prevalent  not 
only  that  agreements  and  specifications  can  be  prepared 
only  by  the  lawyer  and  the  engineer,  but  that  the  layman 
should  accept  what  is  offered  to  him  without  criticism, 
and  that  it  is  not  even  necessary  or  important  that  he 
should  read,  much  less  comment  upon,  the  documents 
prepared  by  the  professional  man.  This  is  a  wrong  view 
to  take  of  the  matter.  Every  business  man  and  every 
city  official  should  carefully  read  and  study  all  documents 
relating  to  his  private  or  official  business,  or  relating  to 
public  business  in  which  he  is  interested  or  for  the  out- 
come of  which  he  may  be  more  or  less  responsible. 

The  important   mental   qualifications  for   preparing   a 

1  Tliose  who  desire  to  go  more  deeply  into  the  subject  of  the  law  of 
contracts  will  find  a  very  satisfactory  and  quite  brief  treatment  of  the 
subject  in  Professor  J.  B.  Johnson's  work  on  "Engineering  Contracts  and 
Specifications." 


70  MUNICIPAL   PUBLIC   WORKS 

business  contract  are,  first,  a  full  knowledge  of  the  facts 
and  details  involved  and  of  the  terms  and  conditions  to 
be  embraced  in  the  document,  and  second,  the  ability  to 
put  in  writing  those  facts,  terms,  and  conditions  in  lan- 
guage whose  meaning  shall  not  only  be  clear  and  exact, 
but  shall  be  so  precise  as  to  exclude  any  conception  other 
than  the  one  intended  to  be  conveyed.  Ability  of  this 
kind  is  not  confined  to  the  ranks  of  the  legal  or  the 
engineering  or  any  other  profession,  and  the  plain,  plod- 
ding business  man  may  possess  it  in  a  very  high  degree. 

A  clause  or  a  provision  in  a  document  may  appear  en- 
tirely definite  and  satisfactory  to  the  one  who  writes  it, 
but  to  another  it  may  convey  or  admit  of  quite  a  dif- 
ferent meaning  from  that  intended  by  the  writer.  Such 
ambiguity  is  not  uncommon  in  contracts  of  the  most  im- 
portant character,  and  often  leads  to  serious  disagreements 
and  unfortunate  results.  It  may  often  be  discovered  by 
the  intelligent  layman,  who  is  likely  to  approach  the 
subject  from  a  point  of  view  different  from  that  of  the 
professional  man. 

A  contract  for  municipal  work  may  be  defined  as  an 
agreement  entered  into  between  the  municipality  on  the 
one  hand  and  a  person,  or  firm,  or  another  corporation, 
called  the  contractor,  on  the  other  hand,  to  do  certain 
things,  each  on  its  part,  for  their  mutual  benefit.  Since 
contracts  can  be  entered  into  only  by  the  authorized 
agents  of  the  corporation,  acting  in  conformity  with  the 
provisions  of  laws  or  ordinances,  the  first  question  to  be 
considered  always  is,  has  the  corporation  or  its  agents 
lawful  authority  to  make  the  improvement  contemplated, 
and  to  enter  into  contract  for   the   performance   of  the 


THE   CONTRACT  71 

work.  This  is  a  matter  to  be  determined  by  the  legal 
adviser  of  the  municipality,  but  it  should  be  answered  in 
the  affirmative  before  any  steps  are  taken  to  enter  into 
contract,  and  reference  should  be  made  in  the  contract, 
when  prepared,  to  the  particular  laws,  or  parts  of  laws, 
from  which  the  authority  to  act  is  derived.  All  the  steps 
leading  up  to  the  final  execution  of  the  contract  must  be 
in  exact,  or  at  least  in  substantial  accordance  with  the 
laws  of  the  state  and  the  ordinances  of  the  municipality, 
relating  thereto.  Unless  these  preliminary  conditions  are 
carefully  complied  with,  the  contract  may  be  illegal  and 
void,  and  the  municipality,  or  the  contractor,  or  both,  may 
find  themselves  involved  in  serious  litigation  which  may 
not  only  prove  disastrous  financially,  but  may  greatly 
delay  the  progress  and  completion  of  the  work.  The 
contract  should  set  out  clearly  and  explicitly  what  is  to 
be  done  by  each  of  the  parties  thereto.  Every  condition 
and  contingency  that  is  likely  to  arise  during  the  pro- 
gress of  the  work  should  be,  as  far  as  possible,  foreseen 
and  provided  for.  Details  and  repetition  should  not  be 
avoided  when  they  are  necessary  to  make  the  meaning 
clear.  Brevity  may  be  the  soul  of  wit,  but  it  is  not  a 
cardinal  virtue  in  contracts. 

Remembering  that  the  contract  usually  embraces,  as  a 
part  of  it,  the  plans  and  specifications  for  the  work  to  be 
done,  great  care  should  be  taken  to  have  these  agree  with 
each  other  and  with  the  terms  of  the  agreement  itself. 
The  necessity  for  this  is  obvious,  but  not  infrequently 
discrepancies  are  allowed  to  occur  through  the  lack  of 
sufficient  care,  particularly  where  changes  or  modifications 
have  been  made  in  the  plans  or  the  specifications  during 


72  MUNICIPAL   PUBLIC  WORKS 

the  final  development  of  the  project.  It  is  usual  to  state 
in  the  agreement  that  where  such  discrepancies  may  be 
discovered  during  the  progress  of  the  work,  one  or  the 
other  of  the  three  parts  which  constitute  the  contract 
shall  govern  ;  or  to  stij)ulate  that  the  engineer  shall  des- 
ignate wliich  shall  be  followed.  But  even  where  such  a 
provision  exists,  there  is  often  room  for  serious  disagree- 
ments between  the  municipality  and  the  contractor,  and 
not  infrequently  the  contractor  may  either  escape  impor- 
tant requirements  or  may  be  thus  required  to  incur 
expense  that  he  had  no  reason  to  anticipate,  and  may  seek 
to  avoid  by  litigation. 

In  the  execution  and  confirmation  of  the  contract 
(where  the  final  approval  of  municipal  officers  or  bodies  is 
necessary),  every  step  should  be  in  accordance  with  the 
procedure  required  by  the  statutes  and  ordinances.  This 
applies  to  the  execution  of  the  bonds  as  well  as  to  the  con- 
tract itself.  The  details  of  compliance  with  these  condi- 
tions must  be  left,  of  course,  to  the  legal  adviser  of  the 
corporation. 

Outside  of  the  purely  legal  aspect  of  such  agreements, 
there  are  a  number  of  principles  relating  to  contracts  in 
general  that  are  worthy  of  careful  consideration.  Before 
the  law,  the  two  parties  to  an  agreement  are  equal,  and 
entitled  to  equal  consideration.  One  party  may  be  a 
great  municipal  corporation,  as  for  instance,  Greater  New 
York,  while  the  other  may  be  an  obscure  contractor  of 
small  means.  It  is  not  only  equally  the  duty  of  each  to 
carry  out  fully  and  in  good  faith  the  terms  and  stipula- 
tions of  tlie  contract  between  them,  but  the  one  is  entitled 
to  the  same  consideration  as  the  other.     As  a  corollary  to 


THE   CONTRACT  73 

this  it  follows  that  contracts  should  be  so  drawn  as  to  be 
equally  fair  and  just  to  both  the  parties  thereto.  No  one 
will  probably  deny  the  truth  of  this  assertion  in  the  ab- 
stract. But  in  practice  it  is  far  too  common  to  ignore  the 
principle,  and  to  attempt  to  secure  to  one  party  advan- 
tages that  are  denied  to  the  other,  or  to  place  one  party 
practically  in  the  power  of  the  other.  This  is  usually 
done  under  the  pretext,  on  the  part  of  the  municipality, 
that  its  interests  must  be  protected  in  every  practicable 
way  from  any  possibility  of  miscarriage  or  loss  in  dealing 
with  the  contractor.  Contracts  for  public  work  are  often 
thus  notoriously  one-sided,  and  attempt  to  place  the  con- 
tractor entirely  in  the  power  of  the  municipality.  Take 
up  almost  any  such  contract  and  every  page  bristles  with 
clauses  intended  to  secure  to  the  municipality  rights  tliat 
are  denied  the  contractor.  Fortunately,  the  courts  usu- 
ally take  a  just  view  of  such  provisions,  and  construe 
unfair  clauses  very  strictly  against  the  party  in  whose 
favor  they  are  drawn,  or  they  may  set  aside  contracts  that 
are  notably  one-sided  and  unfair  to  one  of  the  parties 
thereto,  so  that  if  litigation  is  resorted  to,  these  unfair 
contracts  fail  of  their  object.  This  being  so,  it  would 
seem  advisable,  on  grounds  of  expediency  alone,  to  avoid 
drawing  contracts  in  such  a  way  as  to  attempt  to  secure 
undue  advantage  or  power  to  either  of  the  parties  enter- 
ing into  them.  The  courts  may  be  safely  intrusted  with 
the  duty  of  settling  such  questions  of  difference  as  may 
and  occasionally  will  arise  between  the  municipality  and 
the  contractor.  It  is  particularly  unwise,  because  usually 
illegal,  to  attempt  to  constitute  either  party  or  its  agents 
judges  to  decide  questions  of  difference  that  may  arise. 


74  MUNICIPAL   PUBLIC   WORKS 

It  is  better  to  provide  that  sucli  differences  as  cannot  be 
mutually  adjusted  shall  be  submitted  to  arbitration,  or 
allow  them  to  be  settled  by  the  courts. 

In  this  connection  may  be  mentioned  the  quite  common 
practice  of  stipulating  that  the  engineer  of  the  municipal- 
ity shall  be  the  final  referee  in  all  disputes  that  may  arise 
under  the  contract.  This  is  done  upon  the  assumption 
that  the  engineer  is  a  disinterested  person,  and  therefore 
competent  to  perform  the  functions  of  a  judge  and  decide 
justly  and  equitably  such  questions  of  difference.  But 
the  facts  hardly  warrant  such  an  assumption.  The 
engineer  is  the  paid  agent  and  representative  of  the 
municipality,  employed,  among  other  things,  for  the  ex- 
press purpose  of  guarding  and  defending  its  rights  and 
interests,  and  he  would  be  recreant  to  his  duty  if  he  failed 
to  do  so.  It  is  natural  when  questions  arise  between  the 
municipality  and  the  contractor,  where  the  facts  and  argu- 
ments are  so  evenly  balanced  that  an  unprejudiced  and 
legally  trained  judge  might  find  it  not  easy  to  decide,  that 
the  engineer  should,  unconsciously,  lean  to  the  side  of  his 
employer.  Not  only  so,  but  his  personal  interests  and 
professional  reputation  may  be  involved  to  an  extent  that 
may  unconsciously  warp  his  judgment.  Under  such  con- 
ditions, to  render  an  unprejudiced  and  judicial  decision 
would  require  qualities  of  mind  that  are  more  than 
human.  The  fact  that  provisions  making  the  engineer 
a  referee  in  case  of  differences  are  of  such  frequent  occur- 
rence in  contracts  for  public  work,  and  that  such  provi- 
sions are  not  usually  objected  to  by  the  contractor,  must 
be  regarded  as  strong  evidence  of  the  high  character  of 
the  members  of  the  profession  and  their  reputation  for 


THE   CONTRACT  75 

dealing  fairly  and  justly,  and  it  can  be  said  without  fear 
of  contradiction  that,  as  a  rule,  the  confidence  thus 
reposed  in  the  engineer  is  fully  justified  by  the  results. 
It  may  be  safely  asserted,  however,  that  the  conscientious 
engineer  will  shrink  from  assuming  such  a  responsibility, 
and  would  be  glad  to  see  the  practice  of  attempting  to 
make  him  both  advocate  and  judge  abolished. 

There  is,  however,  a  class  of  questions  which  the 
engineer  in  charge  of  the  work  may  with  propriety  be 
called  ujoon,  and  may  properly  assume  to  decide  ;  such, 
for  instance,  as  the  measurement  of  quantities,  and  other 
questions  of  fact.  Another  class  of  questions,  such  as  the 
reasonable  interpretation  of  the  specifications  from  a  tech- 
nical point  of  view,  and  matters  of  equity  arising  under 
them,  undoubtedly  require  for  their  proper  adjustment 
the  technical  knowledge  and  trained  judgment  of  an 
engineer,  rather  than  the  legal  acumen  of  the  judge,  and 
this  fact  suggests  the  expedient  of  naming  in  the  contract, 
as  referee,  some  disinterested  engineer  in  whom  both 
parties  have  confidence,  to  whom  differences  of  this 
character  may  be  submitted  and  whose  decision  shall  be 
binding  on  both  parties,  so  far  as  the  law  permits. 

It  must  not  be  overlooked,  however,  that  decisions  of  arbi- 
trators are  not  infrequently  set  aside  by  the  courts,  even 
where  both  parties  have  formally  agreed  to  accept  their 
decision  as  final,  and  care  must  therefore  be  exercised  to 
restrict  the  matters  referred  to  them  to  such  as  the  courts 
have  considered  as  coming  within  the  limits  of  their  legal 
adjudication.  It  seems  not  very  easy  to  define  intelligibly 
for  the  general  reader  just  what  powers  may  be  legally 
delegated  to  arbitrators  or  referees  for  final  decision,  but 


76  MUNICIPAL   PUBLIC  WORKS 

it  may  be  broadly  stated  that  questions  of  measurement 
and  the  estimation  of  quantities,  the  classification  of 
materials,  and  the  quality  of  the  work  done,  may  be  safely 
thus  delegated.  The  courts  will  usually  sustain  the  deci- 
sions of  the  engineer  in  charge,  where  he  has  been  made 
final  referee,  in  all  cases  where  he  is,  from  the  nature  of 
the  case,  more  capable  than  the  courts  of  arriving  at  and 
judging  of  the  facts,  provided  it  cannot  be  shown  that  he 
has  made  gross  errors,  or  that  he  has  acted  from  improper 
or  fraudulent  motives  in  arriving  at  his  decision.  But  in 
cases  where  the  courts  are  obviously  as  competent  as  the 
referee  to  pass  upon  the  facts,  and  in  all  cases  of  law  or 
equity,  they  will  be  likely  to  set  aside  his  decision  and 
reopen  the  case.  The  courts  seem  to  regard  with  great 
suspicion  any  attempt  of  a  party  to  "sign  away  his 
rights "  under  the  law,  and  are  disposed  to  regard  such 
action  as  null  and  void. 

The  purpose  of  the  bond  attached  to  the  contract  is 
to  insure  compliance,  on  the  part  of  the  contractor,  with 
the  terms  of  the  agreement  and  to  secure  the  corporation 
against  any  contingent  loss  occasioned  by  his  failure  to 
carry  on  and  complete  the  work.  Its  function  is  there- 
fore a  very  important  one,  and  as  its  value  depends  en- 
tirely on  the  responsibility  of  the  sureties,  it  is  obvious 
that  the  greatest  care  should  be  exercised  in  scrutinizing 
such  sureties.  As  a  rule,  great  carelessness  prevails  in 
this  important  matter.  The  records  of  almost  any  city 
will  show  that  in  very  few  cases  indeed,  where  a  contract 
is  forfeited,  does  the  corporation  succeed  in  collecting  any- 
thing from  the  sureties.  It  is  true  that  not  all  the  failures 
to  recover  are  due  to  the  irresponsibility  of  the  sureties, 


THE   CONTRACT  77 

but  this  is  the  fact  in  the  great  majority  of  cases.  State 
and  municipal  laws  are  generally  very  strict  in  regard  to 
the  acceptance  of  sureties,  but  their  spirit,  if  not  their  let- 
ter, is  very  generally  violated.  It  is  not  sufficient  that  a 
surety  shall  make  oath  that  he  has  unencumbered  property 
of  the  required  value  ;  his  financial  standing  and  his  busi- 
ness reputation  should  be  looked  into  with  the  same  care 
that  a  merchant  would  exercise  before  extending  him 
credit  to  the  extent  of  the  liability  upon  the  bond.  A 
number  of  responsible  surety  companies  now  undertake  to 
underwrite  contractors'  bonds,  and  surety  of  this  char- 
acter is  greatly  to  be  preferred  and  should  always  be 
required  by  municipal  corporations.  Contractors  may 
object  to  furnishing  surety  of  this  kind  upon  the 
ground  of  its  greater  cost,  alleging  that  they  can  secure 
the  signature  of  friends  without  expense  to  them.  As 
a  rule,  those  contractors  who  are  unable  or  unwilling  to 
offer  such  surety  may  safely  be  regarded  as  untrust- 
worthy. 


CHAPTER   VII 

THE  CONTRACTOR 

The  municipal  contractor  does  not  as  a  rule  enjoy  a 
very  enviable  reputation  in  the  community.  He  is  looked 
upon  with  more  or  less  suspicion  by  the  large  majority  of 
citizens  and  taxpayers.  It  is  not  openly  charged  that 
he  belongs  to  what  are  known  as  "  the  criminal  classes," 
but  in  the  minds  of  many  worthy  people  the  line  that 
differentiates  him  from  those  classes  is  not  at  all  well 
defined.  He  may  not  be  a  pickpocket,  nor  a  burglar, 
nor  a  gold-brick  man,  but  that  he  will  steal  and  defraud 
under  the  guise  of  prosecuting  his  business  is  more  than 
suspected  by  many  good  people.  He  may  not  be  a  gam- 
bler in  the  common  acceptance  of  the  term,  but  many 
people  have  an  idea,  strengthened,  perhaps,  by  the  dia- 
monds he  sometimes  wears  and  occasionally  by  his 
"  sporty "  appearance,  that  he  in  some  manner  toys  with 
fickle  fortune.  It  is  true  that  he  is  not  often  directly 
charged  with  murder,  but  there  are  not  a  few  people 
who,  if  such  a  charge  were  made,  would  promptly  ex- 
claim, "  I  told  you  so  !  "  He  is  believed  to  be  ready  to 
resort  to  improper  and  corrupt  means  to  obtain  con- 
tracts, and  when  they  are  obtained,  he  is  supposed  to 
devote  his  best  ability,  not  to  the  execution  of  the 
work  in  accordance  with  the  specifications,  but  rather 
to  devising  schemes  whereby  he  may  evade  their  re- 
quirements.     To  attain  this  end   he  is  supposed   to  be 

78 


THE   CONTRACTOR  79 

ever  ready  to  deceive,  bribe,  or  intimidate  inspectors 
and  city  officials,  and  to  resort  to  any  disreputable 
means  that  may  be  necessary.  He  is  supposed  to  have 
great  political  influence  which  he  uses  to  accomplish 
his  nefarious  purposes.  In  fact,  his  "  pull  "  is  supposed 
to  be  a  part  of  his  business  outfit,  just  as  much  as  are 
his  mules  and  his  carts. 

Yet,  when  we  think  of  it,  there  is  nothing  in  the  nature 
of  the  business  of  undertaking  to  do  public  work  by  con- 
tract that  is  essentially  wrong,  or  that  need  smirch  the 
reputation  of  any  man.  The  business  of  the  merchant  or 
the  manufacturer  or  the  banker  who  supplies  the  needs  of 
the  public  in  other  ways  is  not,  in  its  nature,  a  whit  more 
or  less  honorable  than  that  of  the  contractor.  This  will 
hardly  be  denied  by  his  most  bitter  traducers.  It  will 
hardly  be  claimed  by  the  most  virulent  that,  considered 
simply  as  a  vocation,  there  is  anything  in  contracting 
that  should  specially  attract  criminals,  or  that  should 
demoralize  and  corrupt  the  honest  and  respectable  man 
who  engages  in  it. 

It  would  be  unreasonable  to  suppose,  however,  that 
there  is  not  some  substantial  ground  for  the  unfavor- 
able opinion  that  undoubtedly  exists  in  the  mind  of 
the  public  regarding  contractors  for  public  work,  as  a 
class.  I  say  as  a  class,  because  there  are  many  notable 
exceptions  to  the  rule.  There  are  men  who  have,  almost 
all  their  lives,  followed  the  business  of  contracting  on 
public  work,  than  whom  none  enjoy  to  a  larger  degree 
the  confidence  and  trust  of  the  public;  which  seems  to 
prove  that  it  is  possible  to  be  a  contractor  and  at  the 
same  time  an  honest  and  reputable  man. 


80  MUNICIPAL   PUBLIC  WORKS 

Such  being  the  case,  and  considering  the  importance 
and  magnitude  of  the  municipal  work  that  is  done,  and 
is  likely  to  continue  to  be  done  under  the  contract  sys- 
tem, it  is  desirable  that  the  whole  subject  of  contracting 
and  contractors  should  be  carefully  reviewed.  The  student 
of  municipal  affairs  will  naturally  inquire  why  the  busi- 
ness of  municipal  contracting  has  become  so  demoralized, 
and  will  endeavor  to  find  a  rational  explanation.  There 
must  be  some  cause.  Is  that  cause  traceable  to  the  con- 
tractor alone,  or  is  it  to  be  found  partly,  at  least,  in  the 
conduct  of  others,  and  in  the  system  under  which  con- 
tracts are  let  and  carried  out  ? 

A  little  study  will  show  that  the  situation  is  not  nearly 
so  bad  as  is  represented,  or  as  the  public  believes.  Many 
cases  will  be  found  where  contractors  follow  in  their 
business  the  same  reputable  methods  observed  by  other 
good  business  men  in  the  community.  These,  however, 
do  not  attract  much  public  attention.  It  is  the  disrepu- 
table contractor  who  is  most  in  the  public  eye,  and  who 
occasions  a  large  measure  of  the  notoriety  that  moulds 
public  opinion  regarding  the  business  in  general. 

One  of  the  earliest  observations  of  the  student  will  be 
that  there  is  a  marked  difference  in  the  character  and 
standing  of  that  class  of  contractors  engaged  in  strictly 
public  work,  and  especially  in  municipal  public  work, 
where  contracts  are  necessarily  let  to  the  lowest  bidder, 
and  that  class  whose  business  is  more  particularly  private 
contracting,  where  competition  is  not  so  promiscuous,  and 
where  the  work  is  not  necessarily  awarded  to  the  lowest 
bidder.  It  will  be  observed  tliat  many  persons  and  cor- 
porations, among  the  latter  the  more  important  railroad 


THE   CONTRACTOR  81 

systems,  privately  ask  proposals  from  a  limited  number 
of  contractors  of  known  character  and  responsibility,  and 
in  awarding  contracts  take  into  consideration  tlie  financial 
ability  of  the  bidders,  their  equipment  for  the  particular 
work  to  be  done,  their  reputation  for  carrying  out  their 
engagements,  and  so  forth,  as  well  as  the  prices  they 
offer.  It  will  be  found  that  contracts  so  awarded  are 
generally  carried  out  satisfactorily,  and  are  comparatively 
free  from  the  friction,  vexation,  and  scandal  that  too  gen- 
erally accompany  ordinary  municipal  contracts.  It  must 
be  presumed  that  the  corporations  following  this  method  of 
letting  their  contracts,  find  it  profitable,  —  otherwise  they 
would  not  adhere  to  it.  Further  study  will  establish  the 
fact  that,  as  a  rule,  contractors  engaged  in  this  class  of 
work  are  men  of  at  least  average  intelligence,  business 
capacity,  and  integrity,  as  judged  by  common  business 
standards.  Not  a  few  of  them  are  men,  or  companies 
composed  of  men,  of  undoubted  financial  responsibility, 
of  a  very  high  order  of  business  capacity,  and  of  sterling 
honesty  and  honor,  who  compare  favorably  with  the  best 
in  other  lines  of  business,  and  are  highly  esteemed  in  the 
communities  where  they  reside.  They  seem  to  belong  to 
a  different  class  entirely  from  the  average  municipal  con- 
tractor. This  cannot  well  be  a  mere  coincidence.  It 
indicates  that  there  may  be  something  in  the  method 
of  letting  or  of  conducting  municipal  contracts  that  is 
responsible  for  their  frequent  unsatisfactory  character, 
and  for  the  development  of  a  low  class  of  contractors. 
Let  us  look  into  the  matter  further.  Men,  or  associa- 
tions of  men,  engage  in  the  business  of  contracting  for 
profit,  just  as  other  men  engage  in  other  lines  of  business. 


82  MUNICIPAL   PUBLIC  WORKS 

Unlike  some  otlier  businesses,  that  of  the  contractor 
involves  a  considerable  factor  of  chance  and  uncertainty. 
It  is  impossible  for  any  one,  whatever  may  be  his  knowl- 
edge of  the  obtainable  details  of  any  public  work,  or  his 
experience  in  conducting  similiar  work,  to  estimate  very 
accurately  what  the  work  will  cost.  There  are  always 
elements  of  uncertainty  that  make  it  necessary  for  the 
prudent  contractor  to  provide  a  safe  margin  in  the  prices 
he  proposes,  to  cover  possible  contingencies.  These  con- 
tingencies are  the  unknown  quantity  which  enters  into 
every  proposal  of  the  contractor,  and  the  values  placed 
upon  it  by  different  contractors  may  vary  widely. 

Assuming  that  the  contractor  is  well  informed  in  regard 
to  the  cost  of  similar  work,  he  is  liable,  in  the  face  of 
sharp  competition,  to  trench  unduly  on  a  safe  margin  for 
unknown  elements,  and  to  make  his  prices  so  low  that 
they  will  not  afford  a  reasonable  profit,  and  may  even 
involve  a  loss. 

Now,  municipal  contractors  may  be  roughly  divided 
into  three  general  classes.  To  the  iirst  belongs  the 
contractor  who  conducts  his  business  upon  a  legitimate 
and  honest  basis  and  in  accordance  with  the  principles 
that  govern  other  sound  business  enterprises.  If  success- 
ful in  securing  a  contract,  he  will  expect  to  prosecute  and 
complete  the  work  in  accordance  with  the  requirements 
of  tlie  contract  and  specifications.  He  assumes,  as  he 
must,  tliat  these  requirements  were  made  to  be  complied 
with,  and  that  they  will  be  enforced.  Being  a  man  of 
financial  responsibility  and  business  integrity,  he  cannot 
afford  to  offer  prices  tliat  do  not  })r()inise,  in  his  judgment, 
not  only  to  cover  tlie  cost  of  the  work,  but  to  offer  a  fair 


THE  CONTRACTOR  83 

assurance  of  reasonable  profit.  To  the  second  class  be- 
longs that  numerous  group  of  contractors  who  are  ^vith- 
out  financial  responsibility  or  established  character,  and 
often  without  experience  in  work  of  the  character  they  bid 
upon.  They  are  "  soldiers  of  fortune,"  to  whom  contract- 
ing is  little  more  than  a  species  of  lottery.  They  have 
neither  capital  nor  character  that  can  be  lost  or  impaired. 
They  stand  to  win  only  in  the  lottery,  since  they  have 
nothing  that  can  be  lost.  If  losses  occur  they  do  not 
worry,  since  somebody  else  must  bear  them.  They  frame 
their  proposals  with  the  object  of  being  safely  below 
competitors,  trusting,  if  they  secure  the  contract,  to  their 
wits  or  to  the  tricks  of  the  trade  to  get  something  out  of 
the  deal.  They  are,  naturally,  not  scrupulous  about  the 
means  they  employ  to  gain  their  ends. 

To  the  third  class  belong  those  contractors  who  rely  on 
corrupt  methods  for  their  success.  To  this  class  belongs 
the  "boodler,"  with  all  his  devious  ways.  To  him  the 
character  and  market  price  —  if  he  have  one  —  of  every 
city  official  is  known.  He  knows  which  of  them  are  open 
to  "  influence,"  with  all  that  the  word  implies.  When  a 
contract  is  to  be  let,  he  plans  his  campaign  to  secure  it 
with  a  skill  and  diplomacy  worthy  of  a  better  cause. 
When  his  arrangements  are  satisfactorily  perfected  he  will 
not  hesitate  to  bid,  if  necessary,  below  the  cost  of  doing 
the  work,  relying,  with  reasonable  assurance,  on  his  official 
friends  for  protection  and  profit. 

When  proposals  are  opened  for  doing  any  public  work, 
the  contractors  of  the  first  and  second  class  are  quite  sure 
to  be  represented,  and  the  third  may  be  if  conditions  are 
favorable  to  his  methods  ;  and  the  agents  of  the  corpora- 


84  MUNICIPAL   PUBLIC   WORKS 

tion,  whose  duty  it  is,  are  called  upon  to  consider  the 
proposals  offered,  and  to  award  the  contract.  At  this 
point  will  be  found,  it  is  confidently  believed,  the  source 
of  the  conditions  which  have  brought  the  municipal  con- 
tractor into  disrepute. 

It  must  be  assumed  that  the  agents  of  the  corporation, 
charged  with  awarding  contracts,  are  actuated  alone  by  a 
desire  to  promote  the  best  interests  of  the  public,  and  that 
consequently  they  will  be  disposed  to  make  the  award  in 
accordance  with  facts  and  upon  sound  business  principles, 
just  as  would  a  private  person  or  corporation  in  transact- 
ing his  or  its  own  business.  But  they  at  once  find  them- 
selves hampered  by  laws  or  fixed  customs,  to  which  they 
must  conform,  Avhatever  may  be  their  better  judgment. 
In  many  states  and  cities  the  law  is  explicit  that  contracts 
must  be  awarded  to  the  lowest  responsible  bidder  or  that 
all  bids  must  be  rejected,  and  the  courts  have  quite  gen- 
erally ruled  that  a  bidder  is  responsible  who  is  able  to 
offer  a  satisfactory  bond  for  compliance  with  the  contract. 

This  nearly  always  means  that  the  contract  must  be 
awarded  to  the  lowest  bidder,  since  almost  anybody  can, 
under  the  present  lax  practice,  obtain  sureties  upon  his 
bond.  The  cit}^  authorities  have  therefore  no  choice  in 
the  matter  but  to  award  the  contract  to  the  lowest  bidder, 
since  to  reject  all  bids  and  readvertise  will  simply  result 
in  delay,  as  there  is  no  way  to  shut  out  the  same  objec- 
tionable bidders,  or  others  of  the  same  class,  who  wiU  be 
on  hand  when  the  second  proposals  are  submitted,  and 
they  will  be  confronted  with  tlie  same  conditions  as  before. 
This  would  be  true  no  matter  how  many  times  the  bids 
were  all   rejected   and   the  work   readvertised.      Conse- 


THE  CONTRACTOR  85 

quently  they  may  as  well  act  upon  the  first  lot  of  pro- 
posals offered  and  take  the  consequences.  We  will 
suppose  the  simplest  situation  that  may  be  presented  to 
them.  It  is  found  that  proposals  are  received  from  A  and 
B.  A's  bid  is  much  the  lower  of  the  two.  It  is,  in  fact, 
so  low  that  every  intelligent  person  with  any  knowledge 
of  the  character  of  the  work  knows  very  well  that  it  can- 
not be  honestly  done  at  the  prices  named  without  serious 
loss.  Furthermore,  it  is  well  known  that  A  has  a  very  bad 
reputation  as  a  contractor.  He  is  irresponsible  financially 
and  otherwise.  He  has  never  been  known  to  carry  out  a 
contract  honestly  or  in  a  businesslike  manner  ;  on  the 
contrary,  it  is  well  known  that  he  will  cheat  and  defraud 
at  every  opportunity,  and  that  he  relies  upon  crooked  meth- 
ods to  get  out  whole  or  to  make  a  profit  on  his  contracts. 
The  city  is  confronted  with  the  probability,  almost  the 
certainty,  that  if  he  be  given  the  contract  the  work  will 
not  be  completed  by  him,  or  if  completed  at  all,  it  will  be 
only  after  long  delays  and  endless  trouble.  On  the  other 
hand,  B  is  known  to  have  ample  means  to  carry  on  the 
work ;  he  has  an  established  reputation  for  performing  in 
good  faith  and  in  a  businesslike  way  any  contracts  he  may 
undertake,  and  his  integrity  is  unquestioned.  The  prices 
he  names,  while  higher  than  those  of  A,  seem  to  be  not 
unreasonable, —  apparently  only  sufficient  to  cover  the 
cost  of  the  work  and  afford  a  moderate  profit.  If  the 
body  of  men  who  must  make  the  award  —  say  a  board  of 
public  works,  the  members  of  which  are  good  business 
men  —  had  to  meet  the  same  question  in  their  private 
business,  not  one  of  them  would  hesitate  a  moment  in 
giving  B  the  work  ;  and  they  would  do  the  same  in  the 


86  MUNICIPAL   PUBLIC  WORKS 

public  business  if  the  law  and  misguided  public  opinion 
allowed  them  to  exercise  their  judgment.  But  it  does  not, 
and  if  A  can  give  a  satisfactory  bond,  they  have  no  choice 
but  to  award  the  contract  to  him.  They  may,  and  doubt- 
less do,  know  that  the  bond  does  not,  in  fact,  safeguard 
the  city,  because  bonds,  for  various  reasons,  are  usually 
not  collectible,  or  in  any  event  that  they  are  seldom  en- 
forced. But  the  law  does  not  take  cognizance  of  that 
practical  fact,  and  the  board  is  helpless,  and  A  gets  the 
contract.  The  consequences  are  too  well  known  to  every 
city  official  and  to  nearly  every  citizen  to  need  recital 
here.  As  succeeding  contracts  are  let,  the  operation  is  re- 
peated, and  A  and  his  class  of  contractors  practically  have 
a  monopoly  of  the  business.  B  and  the  class  of  contrac- 
tors to  which  he  belongs  have  not  a  ghost  of  a  chance 
to  secure  work,  and  they  are  soon  driven  from  the  field. 
The  cause  of  the  unsavory  reputation  of  contractors  on 
municipal  work  is  thus  readily  explained. 

So  far  we  have  not  considered  the  chances  of  C  who 
belongs  to  the  third  class  named  above,  —  the  boodler. 
He  is  not  always  absent  when  contracts  are  to  be  let. 
Now  C,  barring  his  "  boodling,"  may  be  a  very  respect- 
able contractor.  He  may  have  and  usually  does  have 
means,  may  be  energetic  and  capable  in  handling  his  con- 
tracts, may  pay  his  just  as  well  as  his  unjust  debts,  and 
may  deal  honorably  with  the  public  at  large.  He  may  in 
fact  have  originally  belonged  to  the  first  class  of  con- 
tractors, and  under  more  favorable  conditions  would  still 
prefer  to  remain  in  that  class.  When  B  finds  himself 
uniformly  unsuccessful  in  securing  contracts  by  fair  and 
open  methods,  and  in  danger  of  being  driven  out  of  his 


THE  CONTRACTOR  87 

chosen  business,  he  may,  if  the  opportunity  offers,  degen- 
erate into  C.  He  may  reason  thus  :  "  I  am  a  contractor 
by  occupation  and  training,  am  not  acquainted  with  and 
may  not  succeed  in  another  line  of  business.  I  depend 
upon  contracting  for  my  living.  I  must  secure  contracts 
or  starve.  I  am  barred  out  by  the  law  from  obtaining 
contracts  at  living  prices  by  fair  and  open  methods.  I 
am  compelled  to  resort  to  some  other  method.  If  city 
officials  who  control  the  letting  of  contracts  are  approach- 
able for  a  consideration,  I  must  avail  myself  of  their  aid. 
With  that  aid  I  can  circumvent  A  and  B  and  get  plenty 
of  work  and  make  good  profits."  If  the  moral  phase  of 
the  matter  presents  itself  to  him,  he  reasons  thus :  "  If  city 
officials  are  disposed  to  barter  their  influence  for  a  con- 
sideration, I  may  as  well  deal  with  them  and  secure  their 
influence  as  any  one  else ;  if  I  do  not,  some  one  else  will. 
It  is  they  who  do  wrong,  not  I.  If  they  are  dishonest 
and  defraud  the  people,  whose  servants  they  are,  I  am  not 
to  blame.  If  the  people  elect  dishonest  men  to  office,  they 
must  take  the  consequences.  It  is  no  concern  of  mine. 
If  they  create  a  condition  of  affairs  which  makes  it  neces- 
sary for  me  to  resort  to  questionable  methods  to  secure 
business,  I  simply  accept  the  situation ;  they  must  not 
hold  me  responsible."  Of  course,  the  argument  is  falla- 
cious, but  it  is  not  without  some  plausibility,  and  C  does 
not  pretend  to  be  deeply  versed  in  either  ethics  or  logic. 
It  is  safe  to  say,  however,  that  as  long  as  influence  is  on 
the  market,  purcliasers  will  abound,  and  C  obtains,  and 
will,  it  is  feared,  continue  to  obtain,  a  good  many  con- 
tracts. "  But  how  can  he  obtain  them  ? "  it  may  be 
asked.     "  Must  he  not  meet  both  A  and  B  in  open  com- 


88  MUNICIPAL  PUBLIC   WOP.KS 

petition  ?  and  if  either  of  these  should  be  the  lowest  bid- 
der, must  not  the  contract  be  awarded  to  him  ?  "  Pre- 
sumably, yes.  But  C  and  his  acquired  friends  may  find  a 
pretext,  possibly  arranged  beforehand,  for  declaring  him 
the  lowest  bidder.  There  are  tricks  in  proposals  as  well 
as  in  other  trades.  A  carelessly  written  or  misformed 
figure  has  been  known  to  read  either  3  or  5,  as  occasion 
might  require.  C  will  usually,  however,  take  care  that 
his  bid  shall  be  safely  low  upon  the  face  of  the  returns, 
though  it  may  be  really  otherwise.  It  is  not  always  the 
case  that  bids  which  on  their  face  are  made  to  appear 
lowest  prove  to  be  so  in  the  end.  The  bid,  for  instance, 
may  be  what  is  known  as  an  "  unbalanced  "  bid. 

A  case  in  New  York  City,  some  years  since,  may  be 
mentioned  by  way  of  illustration.  A  contract  was  let  for 
a  large  quantity  of  excavation  for  a  street  improvement. 
The  preliminary  estimate  of  quantities  indicated  that  the 
cut  was  almost  wholly  earth,  with  a  very  small  quantity 
of  rock.  The  successful  bidder,  whose  proposal,  com- 
puted on  the  basis  of  the  estimated  quantities,  Avas  ap- 
parently lowest,  named  a  very  low  price  on  earth  excava- 
tion and  an  abnormally  high  price  on  rock  excavation. 
As  the  work  progressed  it  developed  that  the  cut  was 
almost  wholly  solid  rock,  and  the  final  estimate  returned, 
when  the  work  was  completed,  was  many  times  the  amount 
of  the  preliminary  estimate,  and  the  profit  of  the  con- 
tractor was  very  large.  It  was  discovered  that  the  city 
employee  by  whom  the  preliminary  estimate  was  made 
up  was  a  near  relative  of  the  successful  contractor.  It 
i.s  not  likely  that  the  false  preliminary  estimate  was  the 
result  of  an  ordinary  mistake,  and  the  inference  was  justi- 


THE   CONTRACTOR  89 

fiable,  though  the  fact  coiild  not  be  proved,  that  the  pre- 
liminary estimate  was  purposely  falsified  to  deceive  other 
contractors,  and  favor  the  one  who  doubtless  had  "  inside 
information."  But  even  if  C  finds  it  necessary  to  bid 
lower  than  A  to  secure  the  contract,  it  does  not  follow 
that  his  contract  will  prove  unprofitable  in  the  end.  His 
friends  among  the  city  ofiicials  can  readily  manage  such  a 
situation.  It  may  develop  that  large  quantities  of  "  extra 
work  "  are  found  necessary,  to  be  paid  for  u|)on  "  extra 
bills  "  at  very  profitable  prices.  While  the  specifications 
may  be  very  exacting,  they  may  be  eased  off  so  as  greatly 
to  decrease  the  cost  of  the  work  to  a  favored  contractor, 
and  thus  allow  a  good  margin  of  profit.  Again,  the 
specifications  may  be  purposely  made  vague,  so  as  to 
admit  of  different  interpretations  which  would  greatly 
vary  the  cost  of  the  work.  The  ordinary  contractor  who 
has  not  arranged  for  special  favors,  must,  to  be  safe,  bid 
on  the  more  costly  interpretation,  while  the  favored 
contractor  ma}^  safely  depend  on  the  interpretation  that 
will  cost  the  least  money.  There  are  many  such  ways  in 
which  a  favored  contractor  may  realize  a  handsome  profit 
where,  apparently,  an  actual  loss  stared  him  in  the  face. 

Even  where  the  law  does  not  specifically  require  public 
work  to  be  let  to  the  lowest  bidder,  custom  and  public 
opinion  are  almost  as  inexorable,  and  not  many  municipal 
officers  are  brave  enough  to  ignore  the  established  rule. 
The  public  has  not  sufficient  confidence  in  the  officials 
whom  it  chooses  to  transact  the  public  business  to  trust 
them  to  exercise  their  business  judgment  in  the  letting  of 
contracts.  The  laws  referred  to,  found  in  the  statutes  of 
many  states,  have  their  foundation  in  this  fact.     Their 


90  MUNICIPAL   PUBLIC   WORKS 

avowed  object  is  to  prevent  fraud,  collusion,  and  favorit- 
ism in  awarding  contracts  for  public  work.  Their  exist- 
ence is  an  implication  that  officials  are  not  to  be  trusted. 
It  is  hardly  necessary  to  say  that  they  do  not  serve  the 
purpose  intended  ;  on  the  contrary,  it  may  be  confidently 
asserted  that  they  work,  indirectly,  against  the  public 
good.  It  may  be  safely  stated  that  official  corruption 
and  fraud  have  never  been,  and  probably  never  will  be, 
prevented  by  legislative  enactment.  It  seems  possible  to 
evade  or  nullify  the  most  iron-clad  statute  that  legislative 
acumen  and  skill  can  frame  and  enact.  If  municipal 
officers  are  disposed  to  be  dishonest  or  corrupt  in  the  let- 
ting of  contracts,  and  are  willing  to  take  their  chances  of 
conviction  and  the  punishment  which  the  law  provides  for 
these  crimes,  they  will  find  a  way  to  accomjilish  their  pur- 
pose, regardless  of  statutory  prohibition.  It  would  seem 
that  the  probability  of  detection  and  conviction  for  these 
crimes  is  not  so  great  as  to  be  deterrent.  Either  this 
must  be  true  or  the  very  prevalent  belief  in  the  dis- 
honesty of  city  officials  generally  must  be  largely 
unfounded,  since  prosecutions  and  convictions  for  this 
class  of  offences  are  very  rare. 

It  must  be  evident,  then,  that  the  only  way  in  which 
contractors  of  the  C  class  can  be  suppressed  is  by  the 
election  of  honest  men  to  the  city  ofiices.  People  seem 
slow  to  realize  that  however  carefully  the  laws  may  be 
flamed  to  prevent  corruption  in  the  conduct  of  public 
work,  safety  can  be  found  only  in  selecting  officials  to  con- 
duct such  work,  in  whose  integrity  they  can  rely  implic- 
itly. It  would  be  a  gross  slander  to  say  that  such  men 
cannot  be  found  in  every  community,  and  a  severe  and 


THE   CONTRACTOR  91 

unwarranted  imputation  on  their  public  spirit  and  patri- 
otism to  assert  that  they  cannot  be  induced  to  accept  public 
office  under  proper  conditions  and  for  adequate  compensa- 
tion. Dishonest  men  can  be  elected  to  office  only  by  the 
sufferance  of  a  considerable  part  of  the  better  class  of 
citizens,  and  the  communities  are  rare  where  the  better 
element  is  not  strong  enough,  if  active  and  united,  to 
control  municipal  elections.  It  may  seem  harsh  to  say 
so,  but  the  municipality  that  voluntarily  places  its  purse 
in  the  hands  of  suspected  thieves  is  entitled  to  scant 
sympathy  when  its  funds  are  stolen.  It  is  a  mistaken 
policy  to  place  questionable  men  in  the  offices  and  then 
depend  upon  laws,  however  stringent,  to  restrain  them 
from  wrong-doing.  On  the  other  hand,  if  only  men  of 
unquestioned  integrity  and  sound  business  judgment  are 
placed  in  office,  restraining  laws  are  unnecessary. 

This  hasty  survey  of  the  conditions  under  which  munici- 
pal contracts  are  awarded,  leads  to  the  conclusion  that 
the  prime  cause  of  the  present  demoralized  state  of  munici- 
pal contracting  is  found  in  the  laws,  or,  in  the  absence 
of  such  laws,  in  the  public  demand  that  contracts  must 
be  awarded  to  the  lowest  bidder.  It  is  unnecessary  to 
argue  that,  in  conducting  municipal  business,  city  officials 
should  be  governed  by  the  same  sound  business  principles 
that  prudence  and  experience  have  shown  to  be  wise  in 
the  conduct  of  private  business.  In  the  letting  of  con- 
tracts for  public  work,  they  should  have  full  power  and 
authority  to  accept  any  proposal  which,  in  their  opinion, 
would  best  serve  the  interests  of  the  city.  In  considering 
the  merits  of  proposals  offered,  they  cannot  prudently 
avoid  taking   into   account  the  character,  responsibility, 


92  MUNICIPAL  PUBLIC   WORKS 

and  business  reputation  of  a  bidder,  as  Avell  as  the  price 
at  which  he  may  offer  to  perform  the  work.  Every  pru- 
dent man  does  this  in  his  private  business.  He  places  his 
orders  for  goods  with  reputable  dealers,  whom  he  can 
trust  to  carry  out  their  engagements  as  to  quality,  time, 
and  circumstance,  and  not  necessarily  with  those  who 
quote  the  lowest  prices.  If  he  has  a  house  to  build,  he 
awards  the  contract  to  one  who  he  believes  will  carry  out 
the  plan  and  specifications  fairly  and  honestly,  even 
though  his  prices  are  higher  than  some  others.  If  he 
wants  a  suit  of  clothes,  he  does  not  buy  it  at  a  cheap  and 
disreputable  clothing  store,  or  of  an  unreliable  tailor, 
because  their  prices  are  lower,  but  he  goes  to  those  in 
whose  skill  and  reliability  he  has  confidence.  Experience 
teaches  him  that  in  the  end  he  will  make  money  by  doing 
so.  This  is  as  true  of  public  as  it  is  of  private  business. 
Low  prices  do  not  necessarily  mean  economy  in  the 
end; — they  often  mean  exactly  the  reverse. 

If  contractors  undertake  to  do  work  at  prices  below 
cost,  it  is  evident  that  somebody  must  lose  money  ;  — and 
usually  it  is  not  the  contractor. 

There  is  another  argument  against  requiring  that  the 
lowest  bid  must  be  accepted.  It  is  a  well-settled  prin- 
ciple in  governmental  administration  that  responsibility 
must  be  undivided,  in  order  that  officials  may  be  held  to 
a  strict  accountability  for  their  acts.  If  the  law  ignores 
this  principle  by  making  the  award  of  contracts  to  the 
lowest  bidder  mandatory,  it  relieves  municipal  officers 
to  that  extent  of  responsibility  for  their  action.  If  the 
law  compels  tlie  award  of  a  contract  to  A  against  the 
better  judgment  of   the  awarding  power,  the  law  must 


THE  CONTRACTOR  93 

bear  the  responsibility  for  the  result,  whether  good  or 
bad.  Officials  acting  under  it  may  claim  they  are  not 
justly  responsible; — they  have  complied  with  the  law 
which  allows  them  no  exercise  of  judgment.  They  may 
even,  if  they  are  in  corrupt  collusion  with  contractor  C, 
make  use  of  this  mandatory  provision  as  a  screen  behind 
which  to  hide  their  iniquitous  schemes.  On  the  other 
hand,  if  public  works  officials  were  required  to  bear  the 
entire  responsibility  of  awarding  contracts  as  well  as  of 
prosecuting  the  work,  and  were  judged,  as  they  might 
then  be,  by  the  results,  there  can  be  little  doubt  that 
the  contractors  of  A's  class  would  soon  find  their  occu- 
pation gone.  As  for  contractors  of  C's  class,  they  will 
be  with  us  as  long  as  dishonest  men  are  found  in  re- 
sponsible charge  of  public  work.  "  Where  the  carrion 
is,  there  will  the  vultures  flock  together." 

If,  therefore,  it  is  desired  to  bring  about  a  reform  in 
the  character  of  contractors  on  municipal  work,  the 
means  to  be  employed  must  be  :  — 

First,  exclude  dishonest  men  from  office.  Select  for 
the  men  or  bodies  of  men  who  are  to  have  charge  of 
the  awarding  of  contracts,  and  the  prosecution  of  public 
work,  men  not  only  of  undoubted  integrity,  but  of 
trustworthy  business  ability. 

Second,  with  such  men  in  charge  allow  them  an  un- 
trammelled hand  to  deal  with  the  city's  interests,  includ- 
ing the  awarding  of  contracts,  as  they  would  with  their 
own  private  business,  and 

Third,  hold  them  strictly  accountable  for  the  results 
achieved. 

There   are    plenty  of  people  who  will   hold   up   their 


94  MUNICIPAL   PUBLIC   WORKS 

hands  in  horror  and  cry  that  this  means  revolution  and 
autocracy.  Even  so ;  a  revolution  is  needed.  Long  ex- 
perience proves  that  the  present  methods  of  dealing 
with  municipal  contract  work  are  most  costly  and  unsatis- 
factory, and  that  a  radical  change  is  needed.  If  the  fore- 
going reasoning  is  fallacious  and  the  conclusion  wrong, 
let  the  fact  be  demonstrated,  and  a  better  remedy 
pointed  out. 

The  ideal  system  of  conducting  public  work  being 
one  under  which  the  business  would  be  managed  upon 
the  same  principles  and  with  the  same  care  that  the 
best  class  of  business  men  apply  to  their  private  busi- 
ness, any  measure  which  promises  to  bring  about  this 
ideal  state  of  affairs  is  at  least  worthy  of  sober  con- 
sideration. 


CHAPTER  VIII 

THE  SUPERVISION  OF  PUBLIC   WORK 

The  contract  for  the  construction  of  any  public  enter- 
prise having  been  entered  into,  it  is  necessary  to  exercise 
careful  supervision  over  the  work  while  it  is  in  progress. 
Such  supervision  belongs  largely  to  the  department  of 
the  City  Engineer,  and  he  may  be  held  accountable  for 
most  of  the  results.  In  a  matter  of  so  much  importance 
his  responsibility  should  not  be  divided,  and  his  power 
and  authority  should  be  largely  untramelled.  The  other 
officers  of  the  corporation  will,  however,  find  that  many 
duties  will  devolve  on  them  which  will  require  the  ex- 
ercise of  their  care  and  vigilance.  It  is  not  unusual 
that  conditions  will  develop,  during  the  progress  of  the 
work,  which  render  desirable  or  necessary  the  making 
of  changes  or  modifications  in  the  terms  of  the  original 
contract.  This  should  in  all  cases  be  accomplished  by 
supplementary  agreements,  which  should  be  prepared 
and  executed  with  the  same  care  as  the  original  con- 
tract. In  fact,  such  supplemental  contracts  often  re- 
quire more  care  and  vigilance  than  the  originals.  For, 
while  their  terms  may  embody  the  changes  desired,  it 
is  important  that  they  shall  not  modify  or  nullify  other 
parts  of  the  original  agreement,  which  they  are  not 
intended  to  affect.  Cases  not  infrequently  occur  where 
supplemental  contracts  are  so  carelessly  or  ambiguously 

95 


96  MUNICIPAL   PUBLIC   WORKS 

drawn  as  to  release  the  contractor  from  important  obli- 
gations imposed  by  the  original  contract.  A  common 
oversight  in  making  supplemental  contracts  which  modify 
the  terms  of  the  original,  is  the  failure  to  secure  the  con- 
sent of  the  sureties  on  the  bond,  which  consent  should 
always  be  in  writing,  and  be  made  a  part  of  the  secon- 
dary contract.  The  neglect  of  this  precaution  may  re- 
sult in  invalidating  the  original  bond. 

Within  certain  stipulated  limits,  contracts  usually  pro- 
vide that  the  engineer  shall  have  power  to  vary  the  de- 
tails of  construction,  and  when  such  changes  affect,  in 
any  material  way,  the  cost  of  the  work,  that  any 
necessary  modification  of  prices  shall  be  agreed  upon 
in  writing  between  the  contractor  and  the  engineer. 
This  is  a  very  proper  and  necessary  provision,  and 
should  in  every  case  be  strictly  adhered  to,  and  no 
such  agreement  should  be  considered  as  valid  or  bind- 
ing upon  either  party,  nor  should  any  work  to  which 
the  change  may  apply  be  allowed  to  proceed  until  the 
written  agreement  relating  to  it  is  duly  signed.  Too 
often,  in  the  press  of  work,  a  verbal  agreement  is 
reached  and  the  work  allowed  to  proceed,  with  the 
intention  of  reducing  the  terms  to  writing  later;  but 
this  is  overlooked  or  neglected,  and  in  such  cases  mis- 
understanding and  trouble  may  result,  particularly  if 
the  contractor  is  disposed  to  take  unfair  advantage  of 
any  oversight  on  the  part  of  the  municipality  or  its 
engineer.  It  is  desirable  that  all  important  instruc- 
tions and  orders  to  the  contractor  should  be  reduced 
to  writing,  and  the  language  of  such  communications 
should  be  exact  and  clear.     They  should  be  very  care- 


THE   SUPERVISION   OF   PUBLIC  WORK  97 

fully  prepared,  and  their  possible  bearing  on  every  fea- 
ture of  the  contract  considered.  It  is  advisable  that  all 
important  communications  of  this  character  should  be 
submitted  to  the  legal  adviser  of  the  municipality  before 
their  delivery  to  the  contractor. 

It  is,  of  course,  to  be  assumed  that  a  contractor  under- 
taking to  execute  any  public  work  has,  before  signing  the 
contract,  made  himself  familiar  with  its  terms  and  re- 
quirements, including  those  of  the  drawings,  specifica- 
tions, and  bond,  which  are  a  part  of  it.  It  must  further 
be  assumed  that,  in  entering  into  such  a  contract,  he  in- 
tends to  comply  in  all  respects  with  those  requirements, 
and  that  the  municipality  will  require  him  to  do  so. 
Barring  such  misunderstandings  as  are  always  more  or 
less  possible,  there  should,  therefore,  be  no  friction  be- 
tween the  contractor  and  the  municipality  or  its  agents 
during  the  progress  of  the  work.  This,  however,  is  an 
ideal  state  of  affairs  which  is  not  very  often  realized, 
some  of  the  reasons  for  which  are  considered  more  in 
detail  in  the  chapter  devoted  to  the  contractor. 

The  municipality  and  its  agents  have  every  right  to 
insist  that  the  contractor  shall  comply  fully  and  fairly 
with  every  requirement  of  the  contract,  and  any  failure 
on  their  part  to  enforce  such  compliance  is  a  violation  of 
duty  and  a  breach  of  trust  on  their  part,  for  which  they 
should  be  held  strictly  to  account.  The  contractor  has 
the  undoubted  right  to  expect  equally  full  and  fair  com- 
pliance on  the  part  of  the  municipality  and  its  agents. 
The  obligations  to  each  other  of  the  parties  to  the 
contract  cannot  differ  in  that  respect.  In  justice  to 
contractors  it  may   be  said  that  city  officials  themselves 


98  MUNICIPAL   PUBLIC   WORKS 

do  not  always  recognize  and   act   upon  this  self-evident 
principle. 

One  of  the  most  frequent  causes  of  friction  between 
contractor  and  engineer  arises  from  the  desire  of  the 
former  to  substitute  other  materials  or  different  methods 
for  those  stipulated  in  the  contract,  the  contractor  claim- 
ing that  the  materials  or  methods  proposed  by  him  are 
equally  good  and  will  produce  results  equal  in  every 
respect  to  those  called  for  in  the  specifications.  If  his 
contention  be  true  beyond  any  question,  there  would 
seem  at  first  thought  to  be  no  valid  reason  why  the  sub- 
stitution should  not  be  allowed,  particularly  if  it  will 
result  in  a  material  saving  of  cost  to  the  contractor.  But 
the  "  just  as  good  "  claim  is  trite  in  all  branches  of  busi- 
ness, and  experience  leads  us  to  be  very  cautious  about 
accepting  it.  The  presumption  should  always  be  against 
it,  and  ample  proof  should  be  insisted  on.  The  munici- 
pality and  its  engineer  should  be  the  sole  judges  in  matters 
of  this  character,  and  should  not  yield  unless  thoroughly 
satisfied  that  the  substitution  asked  for  will  not  be  detri- 
mental to  the  work.  Even  when  they  are  fully  satisfied 
on  the  ground  of  utility,  there  is  generally  a  question  of 
policy  that  must  be  taken  into  consideration.  The  public, 
lacking  exact  information,  and  too  often  ready  to  impute 
wrong  motives  to  municipal  officers,  may  suspect  that  the 
change  was  allowed  purely  as  a  favor  to  the  contractor 
without  proper  consideration  of  the  interests  of  the  munici- 
pality. And  while  in  matters  of  right  and  wrong  the 
engineer  must  be  inflexible,  regardless  of  public  clamor, 
he  may  properly  be  very  jealous  of  his  good  reputation, 
since  his  success  and  his  usefulness  to  the  municipality 


THE   SUPERVISION   OF  PUBLIC  WORK  99 

depend  thereon,  and  he  may  with  perfect  propriety  hesi- 
tate to  grant  a  request  which  has  a  money  value  to  the 
contractor,  but  which  the  contractor  has  no  right  to  ask  or 
expect,  except  as  a  favor.  When,  as  is  not  infrequently 
the  case,  changes  or  substitutions  requested  by  the  con- 
tractor will  result  in  obvious  benefit  to  the  municipality 
as  well  as  to  himself,  there  can  be  no  valid  reason  for 
withholding  consent.  The  general  attitude  of  the  en- 
gineer should  be,  and  usually  is,  one  of  willingness  to  help 
the  contractor  so  far  as  his  duty  to  the  municipality  and 
to  himself  permits,  but  he  must  be  the  sole  judge  in 
matters  of  this  character,  and  the  honest  and  reasonable 
contractor  will  not  expect  him  to  overstep  the  line  of 
conduct  he  may  think  it  right  to  adopt. 

A  very  recent  occurrence  in  a  Southern  city  illustrates 
the  fact  that  it  is  not  always  prudent  or  wise  for  the 
engineer  to  vary  from  the  strict  letter  of  specifications,  in 
order  to  grant  an  apparently  just  concession  to  contractors, 
even  though  such  concession  may  result  in  actual  benefit 
to  his  employers.  In  an  extensive  and  important  public 
work,  the  specifications,  prepared  several  years  before  the 
work  was  constructed,  required  the  use  of  imported 
Portland  cement,  but  the  standard  of  quality,  or  strength, 
stipulated  was  comparatively  low.  In  the  meantime  the 
manufacture  of  American  cement  had  developed  rapidl}', 
and  the  contractor,  finding  that  he  could  purchase  do- 
mestic cement  of  a  better  quality  than  that  required  by 
the  specification  at  a  price  considerably  below  what  he 
would  have  to  pay  for  the  imported  article,  requested  the 
engineer  to  allow  him  to  use  the  domestic  cement.  There 
being  no   apparent   reason  why  the   request   should   not 


100  MUNICIPAL  PUBLIC  WORKS 

be  granted,  since  the  city  would  be  benefited  rather  than 
otherwise,  the  engineer  allowed  the  substitution  in  certain 
parts  of  the  work,  at  the  same  time  raising  the  require- 
ments of  the  specifications  as  to  the  quality  of  the  cement 
to  be  furnished.  The  fact  becoming  known,  a  great  out- 
cry was  raised  by  the  newspapers  and  captious  citizens, 
charges  were  preferred  against  the  engineer,  and  a  public 
scandal  created.  The  engineer,  one  of  the  ablest  and  best 
known  in  his  profession,  whose  character  is  above  sus- 
picion, felt  it  advisable  to  resign,  though  an  investigating 
committee  of  experts  not  only  exonerated  him  from  all 
charges  of  wrong-doing,  but  approved  his  action  in  the 
matter,  as  being  in  the  interest  of  the  city.  It  was  not 
charged,  indeed,  that  there  was  any  intentional  wrong- 
doing or  taint  of  corruption  in  the  transaction,  the  com- 
plaint being  that  the  engineer  should  not  liave  allowed 
the  change  without  compelling  the  contractor  to  make  a 
reduction  in  his  contract  prices  equal  to  the  amount  he 
would  save  by  the  substitution  of  the  cheaper,  though 
better,  cement.  The  result  of  this  unfortunate  controversy 
has  been  not  only  that  the  engineer  has  been  subjected 
to  a  very  painful  experience,  but  that  the  city  has  been 
deprived  of  his  very  valuable  services,  the  work  has  been 
more  or  less  demoralized,  and  the  contractor  has  doubt- 
less suffered  more  or  less  injury. 

It  being  usually  impossible  for  the  City  Engineer  or  his 
immediate  assistants  to  give  constant  attention  to  any  one 
piece  of  work,  inspectors  are  usually  appointed  whose  duty 
it  is  to  be  on  the  ground  whenever  the  work  is  in  prog- 
ress. Of  the  selection  and  appointment  of  inspectors, 
something  has  already  been  said  in  Cliapter  II.     It  is  an 


THE  SUPERVISION  OF   PUBLIC  WORK  101 

error  to  assume  that  inspectors  are  necessary  only  upon 
the  work  of  dishonest  contractors,  and  it  is  equally  errone- 
ous on  the  part  of  the  contractor  to  assume  that  the 
appointment  of  an  inspector  over  his  work  is  necessarily 
an  imputation  upon  his  honesty.  However  desirous  the 
contractor  may  be  of  complying  fairly  and  honestly  with 
his  obligations,  he  cannot,  any  more  than  can  the  City  En- 
gineer, be  present  at  all  times  and  supervise  all  details, 
and  his  subordinates  may  not  only  be  ignorant  and  care- 
less, but  may  not  be  actuated  by  the  same  high  motives  as 
their  principal.  There  seems  to  be  a  settled  conviction 
in  the  mind  of  many  a  foreman  and  skilled  mechanic,  that 
his  principal  is  not  always  quite  sincere,  but  is  talking 
merely  for  effect  when  he  gives  instructions  to  do  the 
work  honestly;  and  that  he  himself  is  never  quite  doing 
his  duty  or  meeting  expectations  when  he  is  not  "  getting 
in  "  a  judicious  amount  of  crooked  work,  even  though  his 
employer  is  not  benefited  thereby.  He  seems  to  feel 
that  he  has  a  reputation  to  sustain  for  clever  work  of  a 
shady  character,  and  cannot  afford  to  let  slip  any  good 
opportunity  for  displaying  his  smartness  and  skill.  He 
needs  watching,  and  it  is  the  inspector's  duty  to  detect 
and  prevent  such  exhibitions  of  his  peculiar  ability.  As 
a  rule  the  honest  contractor  does  not  object  to,  but  rather 
welcomes,  the  presence  of  inspectors  on  his  work,  provided, 
always,  that  they  are  honest,  competent,  and  reasonable. 

The  question  of  how  much  authority  shall  be  delegated 
to  inspectors,  and  what  latitude  of  judgment  they  shall  be 
allowed  to  exercise,  is  one  of  some  difficulty,  and  no  hard 
and  fast  rule  can  be  laid  down.  Be3^ond  the  general  in- 
struction that  they  must  enforce  the  terms  of  the  contract. 


102  MUNICIPAL  PUBLIC   WORKS 

the  judgment  of  the  engineer  must  be  exercised  in  each 
individual  case.  The  inspector's  judgment  should  not,  as 
a  rule,  be  relied  upon  in  the  matter  of  permitting  varia- 
tions from  contract  requirements. 

The  importance  of  keeping  accurate  and  complete  rec- 
ords during  the  progress  of  public  work  seems  not  to  be 
fully  a]3preciated.  Facts  that  may  appear  unimportant, 
and  even  trivial,  at  the  time  of  their  occurrence,  may 
become  of  great  utility  in  the  future,  and  unless  they  are 
recorded  in  writing  at  the  time,  they  may  wholly  escape 
the  memory,  or  may  be  recollected  so  indefinitely  as  to  be 
of  little  value  as  evidence,  after  the  lapse  of  months  or 
even  years.  But  written  records  made  at  the  time  and  on 
the  spot  never  lose  their  value.  In  the  litigation  that  not 
infrequently  grows  out  of  disputes  and  misunderstandings 
in  final  settlement  for  contract  work,  the  case  may  be  lost 
or  won  by  the  absence  or  presence  of  such  records.  The 
inspector  should  carry  a  memorandum  book  in  which  he 
should  note  at  the  time  salient  facts,  and  as  many  as 
possible  of  the  details  of  each  day's  work,  making,  where 
practicable,  sketches  to  illustrate  the  records.  The  receipt 
of  materials,  the  character  of  the  weather,  the  number  of 
hours  worked,  the  number  of  men  and  machines  employed, 
and  any  unusual  occurrences,  should  all  be  included  in  the 
written  record.  The  City  Engineer  and  his  assistants 
should  also  note  and  record  observations,  important  con- 
versations, and  verbal  instructions,  and  all  important  facts 
that  may  come  to  their  notice.  This  may  be  tedious,  and 
may  consume  time  that  could  seemingly  be  better  em- 
ployed, but  the  value  of  sucli  records  in  a  single  disputed 
or   litigated  case  may  be  greater  than  the  whole  year's 


THE   SUPERVISION   OF   PUBLIC   WORK  103 

salary  of  the  person  making  them.  A  case  occurs  to  the 
writer's  mind  where  the  discovery  by  a  contractor  that 
two  different  persons  connected  with  the  work  had  com- 
plete daily  records  of  what  occurred,  influenced  him  to 
desist  from  bringing  suit  for  a  sum  exceeding  one  hundred 
tliousand  dollars.  If  these  employees  had  trusted  to  their 
memory  alone,  after  the  lapse  of  two  years,  the  contractor 
might  have  reasonably  counted  en  their  evidence  being  of 
little  value. 

During  the  construction  of  any  public  work  there  are 
likely  to  be  complaints  made  by  citizens,  of  slow  progress, 
or  charges  or  insinuations  of  bad  work,  or  of  wrong-doing. 
When  these  are  made  in  good  faith  they  deserve  and 
should  receive  respectful  attention.  They  may  and  often 
do  come  from  a  class  of  people  whose  zeal  is  due  more  to 
their  love  of  notoriety  or  to  an  innate  disposition  to  make 
trouble  than  to  more  worthy  motives.  Unfortunately,  it 
is  seldom  good  policy  to  treat  this  particular  class  of 
fault-finders  with  the  contempt  they  deserve.  In  our 
American  system  of  government  every  citizen  may  be 
said  to  be  a  stockholder  in  the  municipal  corporation, 
and  to  have  vested  rights  that  must  be  recognized.  Other 
critics  will  be  men  of  character  and  standing,  actuated 
by  a  sincere  purpose  to  serve  the  best  interests  of  the 
city.  Between  these  two  extremes  all  gradations  of 
self-constituted  inspectors  will  be  found,  and  all  manner 
of  complaints  and  charges,  from  the  frivolous  and  absurd 
on  the  one  hand,  to  the  serious  and  important  on  the 
other,  must  be  listened  to  and  considered.  To  deal  with 
them  all  requires  a  large  stock  of  patience,  good  sense, 
and   diplomacy,  which  might  often  be  better  employed. 


104  MUNICIPAL   PUBLIC   WOKKS 

Complaints  must  be  investigated  more  or  less  as  their 
importance  may  deserve,  explanations  given,  misinforma- 
tion corrected,  and,  when  necessary,  remedies  applied. 

When  a  contract  is  completed,  the  work  is  to  be  finally 
inspected  and  accepted.  The  final  inspection  is  for  the 
purpose  of  ascertaining  if  everything  has  been  done  that 
is  called  for  in  the  contract,  and  to  discover  any  injuries, 
accidental  or  otherwise,  that  may  have  occurred  to  the 
work  during  its  progress,  and  which  it  may  be  the  duty 
of  the  contractor  to  repair.  The  contractor  will  naturally 
be  anxious  to  have  the  work  accepted  with  as  little  delay 
as  possible,  so  that  his  final  estimate  may  be  passed,  and 
he  is  entitled  to  reasonable  expedition  on  the  part  of 
the  engineer,  but  ample  time  should  be  taken  to  make 
the  inspection  deliberately  and  carefully. 


CHAPTER   IX 
THE  MAINTENANCE  AND  REPAIR  OF  PUBLIC   WORK 

The  idea  seems  to  be  somewhat  prevalent  among  citi- 
zens and  municipal  officials  alike,  that  when  the  construc- 
tion of  a  public  work  is  completed,  it  should  remain  in 
perfect  condition  indefinitely,  and  that  all  thought  of 
provision  for  its  care  and  maintenance  may  be  dismissed 
from  the  mind.  When  some  unexpected  defect  develops, 
it  is  noted  with  a  feeling  of  shock  and  suspicion,  and  it 
is  at  once  inferred  that  some  one  has  failed  in  his  duty 
and  that  the  city  has  been  defrauded.  Those  who  so 
think  fail  to  consider  that,  however  carefully  a  structure 
may  be  designed  and  built,  whether  it  be  a  house,  a  ship, 
a  water-supply  system,  or  a  bridge,  defects  both  of  design 
and  construction  are  almost  sure  to  develop  that  escaped 
notice  while  the  work  was  in  progress.  The  best  and 
ablest  of  men  are  fallible,  and  their  work  is  seldom  per- 
fect, even  when  they  do  their  best.  It  will  therefore 
usually  occur  that  from  the  moment  a  public  work  is 
accepted  from  the  hands  of  the  contractor,  and  long 
before  the  effects  of  wear  and  tear  begin  to  appear, 
expenditures  for  maintenance  must  be  provided  for. 

Assuming  that  proper  care  and  diligence  were  exercised 
in  the  design  and  construction  of  the  work,  the  amount  of 
such  expenditures,  during  the  earlier  life  of  the  work, 
should  be  small,  but  such  defects  as  do  appear  should  be 

105 


106  MUNICIPAL   PUBLIC   WORKS 

remedied  promptly.  It  is  therefore  important  that  suitable 
provisions  for  the  maintenance  of  public  work  shall  be 
promptly  made  when  its  construction  is  completed.  That 
"  a  stitch  in  time  saves  nine  "  is  as  true  of  the  repair  of 
municipal  public  works  as  it  is  of  clothes,  and  that  the  neg- 
lect of  the  precept  often  results  in  greatly  increasing  the 
cost  of  repairs,  to  say  nothing  of  possible  contingent  loss 
and  inconvenience,  is  amply  proved  by  experience.  Good 
business  men  understand  and  deal  with  this  matter  more 
rationally  and  intelligently  than  the  average  municipal  cor- 
poration. When  the  mill  owner  installs  a  newly  designed 
machine  he  does  not  expect  that  at  first  trial  it  will  be 
found  to  work  perfectly.  While  in  the  main  it  may  meet 
his  expectations,  he  will  not  be  surprised  if  some  imperfec- 
tions are  found,  and  if  found,  he  will  set  about  remedying 
them  at  once.  Later,  when  parts  of  the  machine  begin 
to  wear  out,  or  breaks  occur,  he  will  have  the  necessary 
repairs  made  promptly.  He  knows  that  it  is  profitable 
to  keep  his  machinery  in  perfect  working  order.  Those 
who  are  intrusted  with  the  care  of  municipal  public 
works  should  follow  the  same  policy. 

Perhaps  no  class  of  public  work  requires  such  close  and 
constant  attention  as  the  streets  and  pavements  of  a  city. 
In  addition  to  defects  of  construction,  and  the  wear  and 
tear  of  use,  their  surfaces  are  being  constantly  disturbed 
for  the  construction  or  repair  of  underground  structures. 
Even  after  every  reasonable  effort  has  been  made  to  have 
all  new  water  and  sewer  connections  and  other  under- 
ground work  put  in  before  the  work  of  paving  has  been 
begun,  it  will  generally  occur  that  within  a  very  short  time 
after  a  new  pavement  is  completed  urgent  demands  to  open 


THE   MAINTENANCE   OF   PUBLIC  WORK         107 

it  will  be  made,  and  the  circumstances  will  be  often  such 
that  the  demand  must  be  acceded  to.  Deplorable  as 
it  may  appear  to  have  new  pavements,  constructed  at  great 
cost,  torn  up  almost  as  soon  as  they  are  thrown  open  to 
travel,  we  may  as  well  admit  that  it  cannot  be  avoided, 
and  content  ourselves  with  careful  provision  for  their 
restoration  as  promptly  and  as  perfectly  as  possible.  It 
is  difficult  to  restore  some  varieties  of  pavement  to  their 
original  good  condition,  and  it  is  not  an  easy  thing  to  do 
in  the  case  of  those  whose  restoration  is  most  practicable. 
The  work  should  be  done  only  by  skilled  labor,  and 
should  not  be  attempted,  as  is  often  the  case,  by  the 
common  labor  available  on  the  work  at  the  time.  Com- 
petent inspectors  are  more  necessary  on  such  repair  work 
than  on  the  original  construction,  and  they  should  always 
be  provided. 

Street  traction  companies  are  usually  the  worst  offenders 
in  the  destruction  of  pavements,  but  they  are  not  always 
without  valid  excuse.  In  this  day  of  rapid  advancement 
in  traction  methods,  changes  and  improvements  follow 
each  other  quickly,  and  it  is  usually  as  much  to  the  inter- 
est of  the  public  as  to  that  of  the  traction  companies 
themselves  that  no  obstruction  shall  be  offered  to  the 
adoption  of  such  improved  construction  as  will  make 
better  service  possible. 

The  records  of  most  cities  indicate  that  the  maintenance 
of  street  pavements  constitutes  a  very  large  item  in  the 
total  municipal  expenditure,  and  a  careful  study  of  the 
matter  will  usually  disclose  that,  with  proper  care  and 
management,  the  cost  might  be  very  largely  reduced. 
The  excessive  cost  of  pavement  maintenance  may  be  due 


108  MUNICIPAL   PUBLIC  WORKS 

to  any  of  the  following  causes,  or   to  a  combination  of 
some  or  of  all  of  them  :  — 

1.  Inefficient  organization  and  supervision. 

This  cause  is  more  or  less  common  in  nearly  every  city. 
The  street  repair  department  will  usually  be  found  to  be 
the  fag  end  of  the  municipal  organization.  Any  broken- 
down  political  hanger-on  is  considered  good  enough  to 
manage  it,  and  the  foremen  employed  are  usually  of  a 
like  character,  —  men  whom  no  good  contractor  or  busi- 
ness man  would  employ  under  any  circumstances.  As  a 
result  the  department  is  without  efficient  organization  or 
competent  management. 

2.  The  labor  employed  is  of  the  poorest  class.  The 
street  repair  force  is  too  frequently  the  haven  into  which 
drifts  the  riffraff  and  offscourings  of  the  city's  laboring 
population.  It  is  used  as  a  means  of  dispensing  charity  to 
the  semi-helpless  classes,  —  those  who  cannot  get  other  jobs 
because  they  cannot  or  will  not  do  efficient  work.  When 
a  so-called  laborer  is  just  a  little  too  good  to  be  sent  to 
the  poorhouse  and  not  good  enough  to  get  employment 
from  those  who  expect  a  fair  day's  work  for  a  day's  wages, 
he  is  by  common  consent  put  into  the  street  repair  gang. 
It  may  be  charity,  but  it  is  the  most  expensive  kind  of 
charity,  as  a  little  observation  will  show.  One  has  but  to 
watch  for  a  few  minutes  the  movements  of  the  ordinary 
gang  of  street  repairers,  to  understand  why  the  work  costs 
so  much  more  than  it  should. 

3.  Lack  of  promptness  in  making  repairs.  Small 
defects  in  a  pavement  that  could  be  repaired,  at  a  tri- 
fling cost,  when  they  first  appear,  will  usually  develop 
quickly,  under  the  stress  of  heavy  travel,  into  yawning 


THE   MAINTENANCE   OF   PUBLIC   WORK         109 

holes,  to  repair  which  "will  require  the  expenditure  of 
dollars,  when  the  expenditure  of  cents  at  the  proper  time 
would  have  been  sufficient. 

4.  Repair  work  is  often  improperly  or  imperfectly  done 
with  inferior  materials,  with  the  result  that  the  same 
repairs  are  often  made  over  and  over  again. 

5.  Large  sums  are  wasted  in  patching  up  old  pavements 
that  are  not  worth  repairing.  The  cost  of  maintaining  a 
pavement,  or  any  other  public  work,  increases  with  its 
age,  and  in  each  individual  case  there  must  come  a  time 
when  the  cost  of  maintenance  is  so  great  that  it  will  be 
cheaper  to  reconstruct  the  work  than  to  continue  making 
repairs.  This  point  is  reached,  of  course,  when  the  cost 
of  maintenance  exceeds  the  cost  of  reconstruction.  To 
illustrate :  let  us  take  the  case  of  a  street  the  repavement  of 
which  will  cost  $10,000.  We  will  assume  that  the  recon- 
structed pavement  will  last  with  usual  repairs  for  a  period 
of  fifteen  years.  If  the  rate  of  interest  is  five  per  cent, 
the  interest  charges  against  the  new  pavement  will  be 
$500  per  year,  and  to  create  a  sinking  fund  which  will 
extinguish  the  debt  incurred  (at  the  same  rate  of  interest) 
will  require  $463.40  per  year,  and  the  cost  of  ordinary 
repairs  may  be  $300  per  j'ear,  making  a  total  charge  of 
$1263.40  per  year.  It  must  be  evident  that  whenever 
the  cost  per  year  of  maintaining  the  old  pavement  exceeds 
this  sum,  it  will  be  economy  to  replace  it  with  a  new  one. 
In  this  computation  we  assume  that  the  old  pavement 
would  be  as  economical  in  use  as  the  new  one,  which  can 
be  true  only  when  the  old  pavement  is  maintained  in  as 
good  condition  for  use  as  would  be  the  new,  —  a  condition 
wliich  is  practically  impossible.     Consequently,  the  incon- 


110  MUNICIPAL   PUBLIC   WORKS 

venience  to  the  public,  and  the  additional  cost  of  travel 
over  the  old  pavement,  becomes  an  important  element  in 
the  problem,  though  it  is  one  not  capable  of  accurate 
computation.  As  the  surface  of  the  old  pavement 
becomes  more  and  more  rough  and  irregular,  not  only- 
will  the  cost  of  hauling  loads  over  it  increase,  but  the 
wear  and  tear  on  horses  and  vehicles  will  increase  in  a 
still  greater  ratio.  Those  who  have  studied  the  matter 
most  carefully  are  convinced  that  this  consideration, 
rather  than  the  bare  question  of  relative  cost  of  main- 
tenance or  reconstruction,  is  by  far  the  most  important, 
and  if  so,  streets  should  be  repaved  long  before  the 
naked  cost  of  maintenance  equals  or  exceeds  the  cost  of 
reconstruction- 
All  these  causes  of  excessive  cost  of  street  repairs  are 
clearly  such  as  can  easily  be  remedied.  All  that  is  neces- 
sary is  to  apply  to  the  department  of  street  repairs  simple 
and  well  understood  business  principles.  The  department 
should  be  organized,  equipped,  and  managed  with  the  same 
care  as  any  other  department  of  municipal  work.  When 
this  shall  be  done,  we  may  expect  a  large  decrease  in  the 
present  cost  of  maintaining  pavements  in  nearly  all  our 
American  cities. 

If  for  any  reason  it  is  thought  impracticable  to  secure 
the  best  results  through  doing  the  work  by  the  munici- 
pality direct,  the  plan  of  having  street  repairs  done  by 
contract  may  be  adopted.  This  has  been  tried  in  a  num- 
ber of  cities  and,  under  proper  requirements  and  restric- 
tions, has  given  good  results.  Such  contracts  may  be 
made  at  a  lump  sum  price  per  year,  or  at  a  price  per 
square   yard,  as  may  be  most   convenient,  but  contracts 


THE   MAINTENANCE   OF   PUBLIC   WORK        111 

should  not  extend  over  a  longer  period  than  five  years. 
In  the  changing  conditions  of  our  American  cities,  no  one 
can  foresee  and  figure  very  safely  upon  a  longer  period. 
On  the  other  hand,  a  much  shorter  period,  say  one  or  two 
years,  is  unsatisfactory,  since  the  contractor  cannot 
economically  provide  the  proper  plant  and  organization 
when  its  cost  must  be  distributed  over  so  short  a  period. 

It  is  quite  certain  that  under  a  well -devised  system  of 
contracting  for  street  repairs,  most  cities  could  reduce 
very  materially  the  cost  of  that  work,  without  any  de- 
terioration in  the  quality  of  work  done.  Where  the 
pavements  have  been  laid  under  a  time  guaranty  by 
the  contractor,  he  can  usually  be  depended  upon  to 
assume  the  responsibility  for  and  to  exercise  proper 
vigilance  in  making  repairs,  and  the  duty  of  the  offi- 
cers of  the  municipality  will  usually  be  discharged  when 
they  see  to  it  that  the  contractor  lives  up  to  the  re- 
quirements of  the  guaranty. 

Whatever  system  may  be  adopted,  it  is  very  desirable 
that  accurate  accounts  should  be  kept  of  the  money 
expended  in  the  repair  of  any  public  work,  and  these 
accounts  should  be  subdivided  and  itemized  so  that  the 
cost  can  be  intelligently  analyzed.  In  the  case  of  streets, 
separate  accounts  should  be  opened  with  each  street, 
or  the  accounts  should  be  so  kept  that  the  amount  ex- 
pended on  each  can  be  readily  ascertained.  If  this  were 
systematically  done,  a  mass  of  information  relating  to 
the  relative  cost  of  maintaining  pavements  of  the  dif- 
ferent kinds  under  different  conditions  of  use,  would 
soon  be  accumulated,  which  would  be  of  the  greatest 
value  in  determining  the   relative  economy  of   the  sev- 


112  MUNICIPAL   PUBLIC   WORKS 

eral  kinds  of  pavements  under  various  conditions  of 
travel  and  treatment. 

The  maintenance  of  other  kinds  of  public  work  is  of 
a  somewhat  different  character  from  street  repairs,  and, 
while  demanding  close  attention,  may  not  require  a 
special  organization ;  but  the  facilities  should,  of  course, 
be  readily  at  hand  for  making  prompt  repairs  when 
they  are  needed. 

The  water  department  is  a  frequent  sufferer  because 
of  tardiness  in  making  repairs  to  pumping  machinery, 
street  mains,  and  other  parts  of  its  plant.  The  powers 
that  control  appropriations  seem  frequently  to  think 
that  as  long  as  an  engine  will  pump  water  it  is  in  good 
enough  condition,  and  money  need  not  be  expended 
upon  it.  The  fallacy  of  such  an  assumption  should  be 
evident  to  any  intelligent  person.  True  economy  con- 
sists, as  every  mechanic  and  mill  owner  well  knows,  in 
making  small  repairs  promptly,  in  order,  if  for  no  other 
reason,  that  much  more  expensive  repairs  may  be  avoided 
later.  It  is  poor  economy  to  put  off  repairs  that  might 
be  made  this  year  for  one  dollar,  until  next  year,  when 
they  will  cost  four  dollars,  even  if  the  machine  may 
not  have  been  permanently  injured  or  ruined  in  the 
meantime  by  the  neglect ;  to  say  nothing  of  the  greater 
cost  of  the  service  rendered  by  it  while  out  of  repair. 

There  sliould  be  in  every  city  a  system  of  regular 
and  periodic  inspection  of  all  public  work,  in  order  that 
needed  repairs  may  be  promptly  discovered  and  made. 
This  inspection  can  safely  be  intrusted  to  the  official 
having  charge  of  each  class  of  public  work.  Inspectors 
should    make  written   reports,  whether   defects   are   dis- 


THE  MAINTENANCE   OF   PUBLIC   WORK         113 

covered  or  not,  in  order  that  a  complete  record  of  the 
condition  of  the  works  may  be  maintained. 

One  of  the  important,  and  sometimes  one  of  the  most 
troublesome  questions  to  he  dealt  with  in  the  manage- 
ment of  public  works,  is  the  procurement  of  necessary 
materials  and  supplies.  Because  it  has  been  found  that 
the  purchase  of  these  supplies  has  sometimes  offered 
opportunity  for  bad  judgment,  extravagance,  and  dis- 
honesty, it  has  been  attempted,  in  many  cities,  to  restrict 
and  regulate  the  purchase  of  supplies  by  so  many  pre- 
cautionary requirements  that  to  procure  them  of  the 
necessary  quality  and  at  the  time  they  are  needed  has 
become  a  very  troublesome  problem.  However  honest, 
competent,  and  careful  the  head  of  a  department  may 
be,  he  is  not  usually  allowed  to  purchase  his  supplies, 
as  the  head  of  a  private  business  may  do,  in  the  open 
market,  at  such  times,  in  such  quantities,  and  at  such 
prices  as  will  in  his  judgment  be  to  the  best  interest 
of  the  corporation. 

In  most  cities  it  is  required  that  for  all  supplies  and 
work  aggregating  a  certain  sum  and  over,  proposals 
must  be  advertised  for,  received,  opened,  and  contracts 
awarded.  In  most  cases  this  is  entirely  practicable  and 
I)roper,  but  it  is  frequently  the  reverse.  It  is  for  many 
reasons  not  always  possible  to  foresee  and  provide  by 
this  process  all  the  supplies  that  may  come  to  be  urgently 
needed,  and  needed  at  once,  under  some  unexpected  con- 
tingency, and  great  inconvenience  and  often  serious  loss 
is  the  result.  On  the  other  hand,  if  it  is  attempted  to 
procure  by  the  prescribed  process  such  a  variety  of  sup- 
plies, and  in  such  quantities  as  may  posBibly  be  required 


114  MUNICIPAL   PUBLIC   WORKS 

to  operate  the  department,  its  head  may  very  justly  be 
open  to  the  charge  of  extravagance,  since  he  may  thus 
lead  the  municipality  to  purchase  articles  that  may 
never  be  used,  or  that  may  not  be  needed  for  a  long 
time  to  come.  In  the  interest  both  of  economy  and  of 
good  service,  therefore,  some  modification  of  the  present 
practice  in  many  cities  should  be  devised  and  adopted. 
It  would  seem  that  in  the  larger  cities  a  purchasing 
department  might  be  organized,  with  a  man  of  undoubted 
integrity  as  well  as  ability  at  its  head  to  whom  the  nec- 
essary latitude  might  be  allowed  to  supply  the  require- 
ments of  the  several  departments,  in  such  manner  as  the 
conditions  and  contingencies  might  make  necessary  and 
practicable.  Through  this  purchasing  department  the 
requirements  of  the  various  departments  could  be  con- 
solidated, so  that  many  supplies  could  be  bought  in 
larger  quantities,  and  therefore  at  lower  prices,  than  if 
purchased  in  smaller  quantities  upon  the  requisition  of 
each  department.  The  purchasing  agent  would,  of  course, 
advertise  for  proposals  and  award  orders  to  the  lowest 
bidder,  whenever  that  method  of  purchase  should  be 
found  admissible.  Specifications  would  be  prepared,  and, 
wherever  practicable,  samples  of  the  kind  and  quality  of 
supplies  required  would  be  exhibited  to  prospective  bid- 
ders, which  samples  would  be  preserved,  and  the  success- 
ful bidder  would  subsequently  be  required  to  duplicate 
them  in  filling  the  order.  Our  cities  might  with  great 
advantage  study  and  follow  in  this  matter  the  admir- 
able systems  prevailing  in  the  purchasing  departments 
of  large  business  corporations  and  the  great  railroads, 
particularly   that   of    the    Pennsylvania    Railroad    Com- 


THE   MAINTENANCE   OF  PUBLIC   WORK         115 

pany,  where  the  system  of  purchasing  supplies  has  been 
brought  almost  to  perfection. 

In  connection  with  the  supply  department  of  every  city 
there  should  be  a  well-equipped  technical  laboratory, 
where  the  kind  of  supplies  best  suited  for  their  several 
purposes  may  be  determined,  and  the  quality  of  those 
delivered  under  orders,  or  used  by  contractors  upon  pub- 
lic works,  tested,  to  ascertain  if  they  come  up  to  the 
standard  specified.  The  cost  of  equipping  and  maintain- 
ing such  a  laboratory  would  be  returned  almost  every  year 
in  cities  of  any  considerable  size,  as  has  been  demonstrated 
in  those  cities  where  such  laboratories  have  been  instituted. 
Their  field  of  usefulness  in  public  work  is  very  large. 
Questions  as  to  the  good  or  bad  quality  of  stone,  brick, 
asphalt,  cement,  sand,  and  other  materials  to  be  used  in 
street  paving  and  other  construction  work,  of  gas  supplied 
by  gas  companies,  of  the  purity  of  the  water  supply,  and 
of  the  purity  and  excellence  of  all  kinds  of  supplies, 
might  there  be  settled  conclusively. 


CHAPTER  X 
ECONOMY,  REAL  AND  FALSE 

The  enormous  expenditures  of  our  cities  for  the  con- 
struction, operation,  and  maintenance  of  their  public 
works,  as  shown  in  the  first  chapter  of  this  book,  at  once 
suggests  the  inquiry  whether  or  not  it  is  possible,  by 
more  economical  administration,  to  reduce  these  expendi- 
tures. A  saving  of  even  five  per  cent  would  mean,  in  the  135 
cities  referred  to,  a  reduction  of  $13,129,140  in  their  total 
annual  disbursements,  equal  to  nearly  69  cents  for  each 
man,  woman,  and  child  of  the  jjopulation.  To  the  average 
family  of  six  persons  this  would  amount  to  an  annual 
saving  in  taxes  of  $4.14  —  a  sum  not  to  be  lightly  disre- 
garded. 

We  have  no  definite  data  upon  which  to  base  an  asser- 
tion that  such  a  reduction  could  be  made  without  detriment 
to  the  several  branches  of  municipal  public  service,  or  to 
any  one  of  them ;  but  the  close  observer  of  the  business 
methods  of  the  average  municipality  would  be  inclined  to 
the  opinion  that  at  least  two  or  three  times  five  per  cent 
could  be  saved  by  such  management  as  the  average  busi- 
ness man  applies  to  his  private  business. 

It  would  not  be  possible  witliin  the  limits  of  this  book 
to  go  into  this  subject  in  detail,  even  if  we  possessed  the 
data  necessary  for  a  thorough  investigation  ;  but  it  may  be 
considered  in  a  general  Avay,  and  some  examples  given  of 
what   seems,  to  the   ordinary  observer,  to  be  promising 

IIG 


ECONOMY,   EEAL   AND   FALSE 


117 


opportunities  for  the  exercise  of  greater  economy  in  the 
administration  of  public  works. 

To  one  who  undertakes  even  a  casual  study  of  the 
relative  cost  of  municipal  public  work  or  service,  the 
great  discrepancy  in  the  unit  cost  of  any  one  kind  of 
work  in  different  cities  must  excite  surprise,  and  the  con- 
clusion must  be  forced  upon  him  that  if  the  statements 
made  public  are  correct,  the  service  must  be  very  poor  and 
inadequate  in  some  cities,  or  that  in  others  the  cost  must 
be  very  excessive.  Some  few  examples  may  be  given  by 
way  of  illustration.  The  figures  used  are  from  the  report 
of  the  Department  of  Labor,  Bulletin  No.  30.  ^ 

The  cost  of  street  cleaning  and  sprinkling  in  a  number 
of  cities  of  the  United  States  having  a  population  ranging 
from  about  200,000  to  350,000  appears  in  the  table  below. 

Table  showing  Cost  of  Street  Cleaning  and  Sprinkling  in 
Several  Cities 


City 

Popula- 
tion, 1900 

Sq.  yds. 
paved 
streets 

Total  cost 
of  street 
cleaning 

and 
sprinkling 

Cost  per 
capita 

Cost  per 

100  sq.  yds. 

of  paved 

streets 

Buffalo,  N.  Y.     . 

352,387 

6,301,778 

1135,215 

0.384 

2.146 

Cincmnati,  0. 

325,902 

6,210.003 

189,956 

0.582 

3.059 

Pittsburg,  Pa.     . 

321,616 

3,960,000 

153,116 

0.476 

3.866 

Detroit,  Mich.     . 

285,704 

5,246,436 

147,381 

0.516 

2.809 

Milwaukee,  Wis. 

285,315 

8,072,537 

142,810 

0.500 

1.769 

Washington,  D.C. 

278,718 

5,048,277 

161,742 

0.580 

3.205 

1  These  figures  are  taken  from  the  Bulletin  for  the  year  1900  (No.  30) 
because  that  for  1901  (No.  36)  does  not  give  the  area  in  square  yards 
of  paved  streets  in  the  several  cities,  the  length  in  miles  of  paved  streets 
being  substituted. 


118  MUNICIPAL   PUBLIC   WORKS 

This  is  a  very  interesting  table,  but  the  reader  must  be 
cautioned  against  placing  too  much  reliance  upon  deduc- 
tions made  from  it.  It  is  not  doubted  that  the  Depart- 
ment of  Labor  made  every  effort  to  collect  and  present 
accurately  the  facts;  but  the  figures  are  subject  to  so 
many  possible  amendments  as  to  make  them,  without 
further  information,  of  uncertain  value  for  purposes  of 
comparison.  It  is  obvious  that  different  systems  of 
account  keeping  might  make  a  wide  difference  in  the 
apparent  results.  In  some  cities  street  sprinkling  is 
paid  for  from  municipal  funds;  in  others  it  is  paid  for 
by  the  private  persons  owning  or  occupying  property 
fronting  on  the  street,  in  which  case  the  cost  does  not 
appear  in  the  above  table.  There  is  a  material  difference 
in  the  cost  per  unit  of  cleaning  and  sprinkling  pavements 
of  the  several  different  kinds,  and  one  kind  may  pre- 
dominate in  one  city  and  a  different  kind  in  another. 
The  figures  used  in  the  table  are  based  on  the  area  of 
paved  streets  alone,  while  in  each  more  or  less  money  is 
expended  on  cleaning  and  sprinkling  unpaved  roadways, 
and  the  ratio  of  paved  to  unpaved  streets  may  differ 
widely  in  different  cities.  Besides  all  these,  there  is  quite 
a  wide  difference  in  the  standard  of  cleanliness  maintained 
in  the  different  cities. 

Yet  when  allowance  is  made  for  all  these  differing  con- 
ditions, it  does  not  seem  possible  to  account  for  the  appar- 
ent fact  that  to  clean  and  sprinkle  100  square  yards 
of  pavement  should  cost  11.77  in  Milwaukee  and  $3.06 
in  Cincinnati,  or  that  the  same  kind  of  work  sliould 
cost  $.38  per  capita  in  Buffalo  and  1.58  per  capita  in 
Cincinnati,  on  any  other  assumption  than  that  there  is  a 


ECONOMY,   REAL  AND   FALSE  119 

wide  difference  in  the  economy  with  which  the  work  is 
conducted  in  the  different  cities. 

Equally  surprising  results  may  be  reached  by  compar- 
ing the  reported  cost  of  other  kinds  of  public  work  in 
different  cities,  but  in  every  case  the  data  are  too  indefinite 
to  make  the  conclusions  of  very  much  value.  At  present 
no  two  cities  keep  their  accounts  on  the  same  basis,  and 
consequently  any  reliable  comparison  of  the  cost  of  work, 
one  city  with  another,  is  impossible.  If  a  standard  system 
of  uniform  accounting  could  be  adopted  and  used  in  all 
cities,  and  if  these  accounts  and  the  reports  made  from 
them  were  in  such  detail  as  to  make  the  results  compara- 
ble, it  would  be  possible  to  arrive  at  intelligent  conclu- 
sions as  to  the  relative  economy  of  similar  work  and 
service  in  the  different  cities,  and  it  would  then  be  pos- 
sible to  fix  the  responsibility  for  careless  or  extravagant 
management.  The  adoption  and  use  of  a  uniform  system 
of  accounting  is  therefore  one  of  the  most  important 
measures  that  is  now  occup3'ing  the  attention  of  those  most 
interested  in  civic  improvements. 

That  large  sums  of  money  are  squandered  yearly  in  our 
cities  is  a  fact  patent  to  every  competent  observer.  This 
may  not  always  be  due  to  gross  negligence,  or  incompe- 
tence, or  dishonesty  on  the  part  of  officials  charged  with 
carrying  out  public  works.  It  is  often  due  to  the  fact 
that  sufficient  thought,  care,  and  skill  are  not  devoted  to 
the  matter,  and  questions  of  immediate  and  ultimate 
economy  are  not  studied  as  thoroughly  as  in  enterprises 
of  equal  importance  and  magnitude  carried  out  by  pri- 
vate business  corporations.  It  is  a  conceded  fact  that  the 
industrial  advancement   of   the    United   States,  and   our 


120  MUNICIPAL   PUBLIC  WORKS 

commercial  supremacy  in  industrial  matters,  is  the  result 
of  strict  and  intelligent  economy  in  every  detail  of  our 
industrial  work,  and  the  low  cost  of  production  which 
we  have  been  able  to  attain  is  the  result  of  the  aggregate 
of  many  small  economies  rather  than  of  large  saving  in 
any  one  item.  The  same  system  applied  to  our  public 
works  would  undoubtedly  result  in  the  saving,  in  the 
aggregate,  of  very  large  sums  in  their  construction  and 
operation. 

It  is  true  that  city  officials  are  not  always  left  free  to 
use  their  best  business  judgment  in  these  matters.  Be- 
sides the  distrust  and  suspicion  with  which  the  public 
seems  uniformly  to  look  upon  any  operations  of  magnitude 
proposed  by  city  officials,  there  is  always  a  certain  con- 
siderable element  in  every  community  which  opposes  any 
new  or  radical  change  in  what  it  calls  the  good  old  way  of 
doing  things,  and  many  meritorious  reforms  that  would 
undoubtedly  greatly  benefit  the  whole  population  are 
often  effectually  blocked  because  of  this  blind  and  unrea- 
soning opposition.  It  is  only  in  rare  cases,  under  our 
form  of  government,  that  the  most  intelligent  and  honest 
officials  can  hope  for  the  success  of  the  most  meritorious 
measures  in  the  face  of  the  determined  opposition  of  even 
a  strong  minority  of  the  public. 

A  notable  example  of  this,  just  now  prominently  before 
the  public,  is  the  prevention  of  waste  of  water  in  our 
cities.  It  has  long  been  notorious  that  in  some  cities 
the  consumption  of  water,  in  gallons  per  capita,  is  more 
than  double  that  in  others.  Careful  investigation  has 
shown  conclusively  tliat  this  discrepanc}^  often  does  not 
result  from  the  fact  that  more  water  is  actually  required. 


ECONOMY,   REAL  AND   FALSE  121 

or  used,  in  some  cities  than  in  others,  but  that  it  is  due 
almost  entirely  to  wastage.  The  waste  of  water  is  due  to 
a  number  of  causes,  among  which  are  leaking  mains  and 
service  pipes,  defective  plumbing,  and  leaking  reservoirs. 
It  is  well  known,  however,  that  by  far  the  greater  part  of 
the  loss  is  due  to  wanton  or  careless  waste  of  water  by 
those  who  are  supplied. 

It  is  usually  possible  to  discover  and  repair  leaking 
pipes  and  reservoirs,  and  careful  inspection  and  vigorous 
measures  may  do  something  to  prevent  waste  by  consum- 
ers, but  when  all  is  done  that  can  be  done  in  these 
ways  it  is  found  that  the  waste  goes  on  to  an  alarming 
extent.  Being  long  accustomed  to  pay  for  water  privi- 
leges under  a  schedule  that  does  not  take  into  considera- 
tion, except  in  a  rough  way,  the  actual  quantity  used,  the 
average  consumer  has  grown  to  believe  that  he  has  the 
right,  not  only  to  use  but  to  waste  all  the  water  he 
pleases,  and  he  resents  any  attempt  to  curtail  or  limit  that 
right.  He  has  grown  to  assume  that  "  water  should  be  as 
free  as  air,"  and  that  therefore  there  exists  no  good  reason 
for  economy  in  the  use  of  the  one  more  than  in  the  use  of 
the  other.  It  should  require  no  argument  to  convince  an 
intelligent  man  that  such  reasoning  is  fallacious,  and  that 
even  air,  if  it  costs  the  city  money  to  supply  it,  should  be 
economized,  but  the  prejudice  of  even  the  more  intelligent 
against  any  attempt  to  limit  the  use  of  water  is  so  great 
that  remedial  measures  are  almost  always  opposed.  The 
love  of  getting  something  for  nothing,  or  for  less  than 
cost,  is  very  strong  in  human  nature.  It  is  evident  that 
the  only  effective  remedy  for  the  waste  of  water  is  some 
plan  under  which  each  consumer  shall  be  required  to  pay 


122  MUNICIPAL  PUBLIC  WORKS 

for  the  actual  quantity  of  water  that  he  uses  or  wastes, 
and  this  means  that  the  water  supplied  to  him  shall  be 
measured  and  charged  up  to  him  at  a  stipulated  price  per 
unit.  The  water  can  be  accurately  measured  by  a  water 
meter  attached  to  each  tap,  and  consequently  those  most 
interested  in  reducing  the  cost  of  public  water  supplies 
very  strongly  advocate  the  general  introduction  and  use 
of  water  meters;  but  to  their  surprise  they  find  themselves 
confronted  with  the  strongest  opposition  by  the  public, 
whose  interests  they  are  conscientiously  trying  to  serve. 
As  a  business  proposition  nothing  could  seem  more  reason- 
able than  that  the  expense  of  supplying  a  commodity  to  the 
public  should  be  borne  by  its  individual  members  in  the 
ratio  of  the  quantity  supplied  to  each.  If  of  two  adjoin- 
ing neighbors,  the  one  has  sufficient  regard  for  the  interest 
of  the  municipality  to  impel  him,  while  using  all  the  water 
he  actually  needs,  carefully  to  prevent  any  waste,  while 
the  other,  through  reckless  waste,  consumes  double  the 
quantity,  it  would  seem  but  ordinary  justice  to  charge  the 
latter  twice  as  much  as  the  former.  The  common  argu- 
ment that  the  use  of  meters  would  unduly  restrict  the  use 
of  water  by  the  poorer  classes,  is  not  only  improbable  on 
its  face,  but  is  disproved  by  experience.  The  opposite  is 
more  likely  to  be  true.  The  community  at  large  must 
ultimately  pay  the  cost  of  all  water  supplied.  If  by  pre- 
venting waste  the  quantity  of  water  supplied  may  be 
reduced  one-half,  the  aggregate  cost  will  be  reduced  in 
something  like  the  same  ratio,  and  water  rates  may  be 
reduced  accordingly,  and  the  poor  man  should  get  all  the 
water  he  needs  for  less  money  than  he  now  is  forced  to 
pay,  and  therefore  could  afford  to  use  it  more  lavishly. 


ECONOMY,    REAL  AND   FALSE  123 

From  whatever  point  the  matter  is  intelligently  viewed, 
the  conclusion  is  forced  on  the  mind  that  the  general 
introduction  and  use  of  water  meters  should  be  encouraged 
and  enforced,  and  yet  it  is  surprising  how  strongly  their 
introduction  is  opposed  by  the  public. 

The  prevention  of  waste  is  the  most  promising  field 
for  economy  remaining  in  this  department  of  the  public 
service.  Engineers  have  devoted  a  great  deal  of  study 
and  experiment  to  reducing  the  cost  of  pumping  water, 
and  the  almost  perfect  modern  high-duty  pumping 
engine  places  this  part  of  the  service  where  possible 
economy  is  measured  by  fractions  of  a  cent  per  thou- 
sand gallons.  The  cost  of  constructing  and  operating 
distributing  systems  has  also  been  reduced  very  close 
to  a  minimum,  but  these  small  economies  avail  little 
if  one-half  the  water  supplied  is  wasted.  Of  course, 
the  public  will  in  time  become  educated  to  under- 
stand and  appreciate  the  importance  of  this  matter ; 
and  city  officials  and  public-spirited  citizens  should 
make  every  possible  effort  to  promote  correct  views  upon 
the  subject. 

There  are  not  a  few  American  cities  where,  because  of 
careless  waste,  the  supply  of  water  has  become  apparently 
inadequate,  and  additional  supplies,  which  can  only  be 
secured  at  great  expense,  are  loudly  called  for.  In  not 
a  few  of  these  cities  the  present  supply  would  be  ample 
if  meters  were  used  and  reckless  waste  thus  prevented, 
and  the  large  expenditure  for  additional  supply  would 
thus  become  unnecessary  for  many  years  in  the  future. 

While  it  is  not  the  purpose  of  this  book  to  go  largely 
into   statistics,  it   seems   desirable   that   this   subject   of 


124 


MUNICIPAL  PUBLIC  WORKS 


water-waste  prevention  by  the  use  of  meters  should  be 
placed  before  the  public  at  every  opportunity,  and  some 
figures  illustrative  of  the  statements  made  above  are 
therefore  presented. 

Mr.  George  I.  Bailey,  C.E.,  Superintendent  of  the 
Bureau  of  Water,  in  Albany,  New  York,  has  recently 
gathered  a  large  mass  of  statistics,  with  the  view  of 
ascertaining  the  consumption  of  water  per  capita  in 
the  various  American  cities,  and  the  effect  of  the  use 
of  meters  in  reducing  that  consumption,  and  the  re- 
sults of  this  investigation  were  published  in  The  Engi- 
neering Neivs  of  April  18,  1901. 

The  figures  for  a  number  of  cities  are  given  below :  — 


Cities 

Population, 

census  of 

1900 

Per  cent 
of  taps 
metered 

Consumption 
per  capita 

Philadelphia,  Pa 

Providence,  R.I 

Worcester,  Mass 

Boston,  Mass 

Buffalo,  N.Y 

Detroit,  Mich 

Milwaukee,  Wis 

Kansas  City,  Mo 

Denver,  Col 

Memphis,  Tenn 

Atlanta,  Ga 

1,293,700 
175,597 
117,421 
560,900 
352,400 
285,700 
285,300 
163,750 
133,859 
102,330 
89,872 

0.5 

82.6 

94.3 

5.5 

1.6 

10.0 

67.6 

40.0 

7.6 

8.3 

91.6 

229 

54 

70 

143 

233 

146 

80 

62 

121 

125 

84 

It  will  be  noticed  that  in  these  cities  the  consumption 
per  capita  decreases  very  rapidly  as  the  percentage  of 
taps  metered  increases.  Compare  the  heavy  consump- 
tion  in   Philadelphia,   Boston,   and   Buffalo,   where   less 


ECONOMY,   REAL  AND   FALSE  125 

than  6  per  cent  of  the  taps  are  provided  with  meters, 
with  that  of  Providence,  Worcester,  Milwaukee,  and 
Atlanta,  where  from  67.6  per  cent  to  9 J:. 3  per  cent 
are  metered.  The  contrast  is  very  striking,  and,  even 
if  we  make  proper  allowance  for  the  increased  consump- 
tion due  to  the  larger  size  of  the  unmetered  cities,  it  is 
clear  that  the  meters  have  effected  a  very  large  economy. 

Averaging  the  consumption  in  all  the  cities  investi- 
gated, and  classifying  them  with  regard  to  the  per- 
centage of  taps  metered,  Mr.  Bailey  arrives  at  the 
following  significant  results. 

The  average  consumption  per  capita  is  :  — 

In  the  cities  where  less  than  10  %  of  taps  are  metered      .  153  gals. 

In  the  cities  where  from  10%  to  25  7o  of  taps  are  metered    .  110  gals. 

In  the  cities  where  from  25%  to  50%  of  taps  are  metered    .  104  gals. 

In  the  cities  where  over  50  %  of  taps  are  metered  ....  62  gals. 

These  figures  seem  to  warrant  the  assertion  that  the 
general  use  of  meters  would  reduce  the  consumption  of 
water  to  at  least  one-half,  and  possibly  to  one-third,  of 
the  quantity  it  is  necessary  to  provide  where  their  ab- 
sence allows  waste  to  go  on  unchecked.  As  it  appears, 
from  the  figures  given  in  Chapter  I,  that  the  present 
cost  per  year  of  operating  and  maintaining  water  supplies 
in  cities  of  30,000  or  more  population  is  over  fourteen 
and  a  half  millions  of  dollars,  it  is  safe  to  conclude 
that  the  general  adoption  of  water  meters  would  re- 
sult in  a  saving  of  from  five  to  seven  millions  of 
dollars  annually  in  the  cost  of  supplying  water  to 
these  cities. 

Among  our  municipal  public  works  it  would  seem  at  a  first 
superficial  glance  that  street  pavements  are  of  the  simplest 


126  MUNICIPAL   PUBLIC   WORKS 

character,  and  present  less  opportunity  for  the  aj^plication 
of  the  principles  and  practice  of  economy  than  does  any 
other  branch  of  municipal  work.  Perhaps  this  seeming 
simplicity  may  account  for  the  fact  that  less  attention  is 
ordinarily  given  to  the  study  of  this  branch  of  jDublic 
work  than  to  any  other.  Whatever  may  be  the  cause,  I 
unhesitatingly  assert  that  no  branch  of  municipal  work 
has  been  so  greatly  neglected,  and  that  none  offers  such  a 
promising  field  for  the  exercise  of  large  economies. 

The  primary  function  of  paved  roadways  is  to  supply  a 
hard,  smooth,  and  durable  surface  over  which  the  vehicu- 
lar business  of  the  city  may  be  conducted  with  the  least 
expenditure  of  power.  Other  minor  functions  are  of 
secondary  importance.  When  an  engineer  designs  a 
bridge,  the  first  question  that  must  be  considered  is  the 
loads  to  which  the  structure  will  be  subjected,  and  when 
this  is  ascertained,  the  bridge  is  proportioned  in  every  part 
to  carry  safely  that  load.  The  same  principles  should  be 
applied  in  designing  roadway  pavements,  though  the 
problem  is  not  quite  so  simple  as  in  the  case  of  the  bridge. 
Not  only  must  the  quantity  of  travel  to  which  the  pave- 
ment will  be  subjected  be  considered,  but  the  character  of 
that  travel  must  also  be  taken  into  consideration  ;  as  well 
as  some  other  requirements  of  importance.  But  all  the 
requirements  being  known,  the  pavement  should  be  scien- 
tifically designed  to  meet  them.  In  other  words,  it 
should  be  treated  as  a  purely  commercial  and  engineering 
problem,  —  the  designing  of  means  to  meet  certain 
ends,  —  and  tlie  whole  treatment  of  the  problem  should 
be  based  on  business  considerations.  Naturally  the  first 
question  that  will  arise  is,  What  is  likely  to  be  the  quan- 


ECONOMY,   REAL   AND   FALSE  127 

tity  and  character  of  the  travel  to  which  the  street  pave- 
ment will  probably  be  subjected  ?  The  street  may  be  in 
the  active  business  district  of  a  large  city,  where  thou- 
sands of  vehicles  of  various  classes  carrying  heavy  loads 
will  use  the  pavement  daily,  or  it  may  be  in  an  outlying 
residential  district,  where  a  few  carriages  and  the  vehicles 
of  the  tradesmen  who  supply  the  wants  of  the  residents 
will  ordinarily  constitute  the  only  traffic  to  be  accommo- 
dated. It  should  be  obvious  on  a  moment's  thought  that 
the  two  streets  admit  of  and  require  entirely  different 
modes  of  treatment.  In  the  first  case,  the  paved  portion 
of  the  roadway  should  be  made  as  wide  as  the  boundaries 
of  the  street  will  permit.  In  the  second,  however  wide 
may  be  the  street,  the  quantity  of  travel  will  require  a 
paved  roadway  only  wide  enough  to  allow  the  few  vehicles 
used  to  pass  each  other  safely.  But  here  an  extravagant 
blunder  is  often  if  not  usually  made.  Wide  streets  in 
residence  districts  are  desirable  and  advisable  for  reasons 
not  here  necessary  to  enumerate ;  but  it  does  not  follow 
that  wide  paved  roadways  are  necessary  or  advantageous. 
Yet  it  is  a  very  common  practice  to  apply  to  such  streets 
the  same  treatment  as  to  the  heavy-travelled  business 
streets.  Thus,  on  a  residence  street  eighty  feet  wide 
between  property  lines,  it  is  customary  to  locate  the  curb 
line  from  twelve  to  sixteen  feet  from  the  property  lines, 
thus  leaving  a  roadway  from  fifty-six  to  forty-eight  feet 
in  width,  and  when  a  permanent  pavement  is  constructed 
it  is  customary  to  pave  this  whole  width  of  not  less  than 
forty-eight  feet.  A  paved  roadway  thirty  feet  wide 
would  undoubtedly  furnish  the  most  liberal  accommoda- 
tion for  all  the  travel  on  the  street,  and  the  money  spent 


128  MUNICIPAL   PUBLIC   WORKS 

in  paving  any  additional  width  is  absolutely  wasted. 
Indeed,  it  is  worse  than  wasted,  because  this  additional 
width  of  paved  roadway  will  increase,  in  the  ratio  of  its 
width,  the  cost  of  maintaining,  cleaning,  sprinkling,  and 
otherwise  caring  for  the  pavement.  Not  only  so,  but  the 
narrower  pavement  practically  adds  to  the  useful  depth  of 
the  abutting  lots.  The  area  not  occupied  by  the  pave- 
ment may  be  set  in  grass  or  flowers,  and  thus  enhance  the 
beauty  of  the  street.  The  cost  of  the  pavement  per  square 
yard  would  be  practically  the  same  whether  proved  forty- 
eight  or  thirty  feet  wide,  and  consequently  the  wide  pave- 
ment would  cost  the  city  or  the  property  owners  sixty  per 
cent  more  than  the  narrow  pavement.  Assuming  that 
the  street  is  half  a  mile  long  and  that  the  cost  of  the 
pavement  is  $2.40  per  square  yard,  the  saving  in  the  total 
cost  of  paving  it  would  be  more  than  $12,500  ;  or  to  put 
it  in  a  different  form,  the  improvement  might  be  con- 
tinued three-tenths  of  a  mile  farther  at  the  same  cost  if 
the  narrow  pavement  were  used  instead  of  the  wide.  We 
have  assumed  for  this  street  the  maximum  width  that 
the  conditions  would  require.  As  a  matter  of  fact,  the 
paved  roadway  might  often  be  reduced  to  a  width  of 
twenty-four  feet  instead  of  thirty  feet,  and  it  would 
still  be  amply  wide  to  accommodate  the  actual  needs  of 
the  travel.  It  may  be  objected  that  carriages  and  other 
vehicles  could  not  turn  around  in  a  street  twenty-four 
feet  Avide.  Many  of  them  doubtless  could  not,  but  with 
blocks  of  the  usual  lengtli  such  vehicles  could  go  around 
the  block,  or  the  street  intersections  could  be  widened  out 
so  that  turns  could  be  made  there.  It  is  a  very  moderate 
statement  to  say  that  many  millions  of  dollars  have  been 


ECONOMY,   REAL  AND   FALSE  129 

squandered,  or  worse  than  squandered,  in  American  cities 
by  making  tlie  pavement  on  roadways  of  residential  dis- 
tricts unnecessarily  wide. 

Again,  the  character  of  the  pavement  that  will  supply 
most  economically  the  requirements  of  any  street  must 
be  carefully  studied.  A  pavement  should,  in  the  main,  be 
considered  from  a  business  or  economic  standpoint.  That 
it  is  poor  business  to  use  on  a  light-travelled  residence 
street  the  same  character  of  pavement  that  is  necessary 
for  a  heavy  business  street,  ought  to  be  obvious  to  the 
dullest  ;  and  yet  we  see  the  principle  frequently  disre- 
garded. While  it  is  true  that  we  have  not  yet  the  data 
necessary  to  deal  with  this  question  with  scientific  accu- 
racy, it  may  be  safely  predicted  that  the  time  will  come 
when  engineers  will  devote  to  the  street-paving  problem 
something  like  the  same  scientific  treatment  that  they 
now  apply  to  railroad  construction  and  bridge  building. 
In  the  meantime,  we  have  sufficient  information  and  data 
to  enable  us,  aided  by  good  business  judgment,  to  avoid 
most  of  the  economic  blunders  in  street-paving  that  are 
now  so  common. 

The  selection  of  the  hind  of  pavement  to  be  used  on  any 
given  street  is  a  matter  of  importance,  deserving  much 
more  attention  and  study  than  it  usually  receives.  I  have 
no  intention  of  going  into  the  subject  of  the  relative 
merits  of  the  several  varieties  of  street  pavement  now 
before  the  public,  but  wish  only  to  call  attention  to  the 
necessity  of  considering  the  matter  from  an  economic  point 
of  view,  and  to  give  some  illustrations  to  show  that  it  is  a 
question  that  should  not  be  decided  offhand,  or  without 
careful  study  and  intimate  acquaintance  with  the  subject. 


130  MUNICIPAL   PUBLIC   WORKS 

The  true  cost  of  a  street  pavement,  excluding  all  ques- 
tions of  the  relative  economy  in  use,  and  considerations 
of  beauty,  comfort  in  use,  etc.,  is  made  up  of  a  number  of 
items  as  follows  :  — 

(1)  The  first  cost  of  the  pavement.  (2)  The  cost  of 
keeping  it  in  repair.  (3)  The  cost  of  keeping  the  road- 
way clean.  (4)  The  life  of  the  pavement.  (5)  Interest 
charges  on  the  sum  invested.  (6)  Cost  of  renewal  when 
the  pavement  is  worn  out.  All  these  elements  must  be 
taken  into  consideration  in  order  to  determine  which  of 
two  or  more  kinds  of  street  pavement  is,  aside  from  other 
considerations,  most  economical.  It  will  not  do  to  base  a 
conclusion  on  either  the  relative  first  cost  or  the  relative 
durability  (life)  of  the  pavement  alone. 

As  an  example  let  us  compare  two  pavements  proposed 
to  be  used  under  similar  conditions.  We  will  assume  that 
the  street  to  be  paved  is  a  business  street  in  one  of  the 
smaller  cities,  having  a  rather  heavy  travel.  For  the 
pavements  to  be  compared,  we  will  take  a  first-class  mac- 
adam, as  representing  the  cheapest  in  first  cost,  and  sheet 
asphalt  as  representing  one  of  the  highest  priced  pave- 
ments in  common  use.  While  we  have  not  the  necessary 
data  to  give  absolutely  accurate  figures,  those  given  below 
may  be  taken  as  representing  a  fair  average  in  American 
cities  at  the  present  time.  Prices  will,  of  course,  vary  in 
different  localities  with  the  cost  of  materials  and  with 
differing  conditions  under  which  the  work  must  be  done. 
Whether  we  accept  those  here  used  or  not,  they  will  serve 
to  illustrate  the  correct  procedure  in  determining  which, 
under  given  conditions,  is  the  most  economical  pavement 
to  use. 


ECONOMY,   REAL  AND  FALSE 


131 


Table  illustrating  approximately  the  relative  ultimate 
cost  per  square  yard  per  year  of  macadam  pavement  and 
sheet  asphalt  pavement  under  similar  conditions 


. 

Macadam 

Asphalt 

Probable  life  of  pavement,  years      .... 

6 

15 

First  cost  of  pavement  per  sq.  yd 

$1.10 

$2.40 

Cost    of    maintenance    in    good    condition 

during  life 

.60 

.60 

Interest  on  first  cost  during  life  at  4  %     .     . 

.26 

1.44 

Interest  on   cost   of    maintenance    at  4  %, 

assuming    that    this    cost   is   distributed 

evenly  over  the  life  of  the  pavement.     . 

.07 

.18 

Cost  of  renewal  with  same  kind  of  pavement 

at  end  of  life 

.60 

1.40 

Total 

$2.68 

$6.02 

Annual  cost  during  life  of  pavement,  per  year 

.45 

.40 

It  thus  appears,  if  our  figures  are  correct  (and  they 
are  based  upon  present  experience),  that  while  the  first 
cost  of  tlie  asphalt  pavement  is  more  than  double  that  of 
the  macadam,  the  ultimate  cost  of  the  first  is  materially 
less  than  that  of  the  second. 

We  have  considered  only  the  first  cost,  and  cost  of 
maintenance  and  renewal.  There  are  other  equally  im- 
portant considerations  that  must  be  taken  into  account 
in  arriving  at  the  true  relative  economy  of  various  pave- 
ments. Among  the  more  important  of  these  are  :  the 
relative  power  required  to  haul  loads  over  the  pavement 
and  the  consequent  difference  in  cost  of  transportation  ; 
the  facility  with  which  the  pavement  may  be  cleaned,  and 
the  difference  in  the  cost  of  cleaning,  which  varies  con- 


132  MUNICIPAL  PUBLIC   WORKS 

siderably  with  the  different  pavements  ;  their  relative 
qualities  from  a  sanitary  standpoint,  and  the  numerous 
qualities  that  determine  the  relative  comfort  and  conven- 
ience of  each  in  use.  We  shall  not  consider  these  in 
detail,  the  object  being  only  to  point  out  that  in  this 
neglected  department  of  street-paving  there  is  ample 
opportunity  for  the  exercise  of  the  principles  of  true 
economy. 

It  should  be  borne  in  mind  that  true  economy  does  not 
necessarily  mean  low  first  cost.  It  may  and  often  does 
mean  quite  the  opposite.  Cities  must,  of  course,  some- 
times cut  their  coats  according  to  the  cloth,  and  respect 
for  a  proper  debt  limit  and  a  reasonable  tax  rate  will 
often  prevent  them  from  doing  that  which  would  be 
clearly  the  most  economical,  judged  by  ultimate  results. 
For  this  reason  it  is  wise  for  the  municipality  to  avoid 
engaging  in  too  many  business  enterprises,  in  order  that 
ample  capital  may  be  had  for  the  handling,  in  the  most 
economical  manner,  of  those  it  does  undertake.  An 
antiquated  and  decrepit  pumping  engine  may  be  capable 
of  supplying  all  the  water  required  for  many  years  to 
come ;  but  if  it  appears  that  a  modern  machine  of  the  best 
type  will  do  the  work  at  so  much  less  cost  for  coal,  at- 
tendance, and  repairs  as  to  make  it  profitable  to  throw 
the  old  machine  in  the  scrap  pile,  this  should  be  done  at 
once.  If  this  policy  were  pursued,  many  a  venerable  pump- 
ing engine  now  in  use  would  soon  disappear. 

The  modern  manufacturer  practises  real  economy  when 
he  promptly  displaces  an  inferior  machine,  possibly  al- 
most new,  by  one  of  later  design,  that  will  effect  even  a 
small  saving  in  cost  of  the  work  turned  out. 


ECONOMY,   REAL  AND   FALSE  133 

We  might  pursue  this  subject  much  farther,  but 
enough  has  been  said  to  show  that  there  is  a  wide  field 
for  tlie  exercise  of  economy  in  the  department  of  public 
works,  and  to  point  out  some  of  the  directions  in  which 
it  may  be  applied. 


CHAPTER  XI 
GUARANTEEING  PUBLIC  WORK 

The  practice  of  embracing  in  contracts  for  municipal 
work,  particularly  those  for  street-paving,  a  provision 
that  the  contractor  shall  guarantee  the  work  done  by  him 
for  a  number  of  years,  has  become  very  common,  and  the 
tendency  to  require  these  guaranties  seems  to  be  growing. 
Whether  such  guaranties  are,  on  the  whole,  beneficial  to 
the  interests  of  the  municipality  or  not,  is  a  question  that 
admits  of  argument  on  both  sides.  At  first  thought  it 
would  appear  that  the  municipality  has  everything  to 
gain  and  nothing  to  lose  ;  but  the  question  has  not  been 
pursued  to  its  ultimate  consequences,  and  the  whole 
problem  has  not  been  worked  out  with  the  care  its  impor- 
tance deserves.  If  it  be  granted  that  it  is  proper  and 
wise  to  require  and  enforce  a  guaranty,  it  must  be 
admitted  that  the  lansfuagre  of  the  contract  in  which  the 
conditions  of  the  guaranty  are  expressed,  is  often  so 
loose  and  indefinite  on  the  one  hand,  or  so  sweeping  and 
so  obviously  unjust  on  the  other  hand,  as  to  make  its  ap- 
plication to  actual  conditions  difficult  if  not  impracticable. 
A  brief  consideration  of  the  whole  subject  may  therefore 
be  of  interest. 

We  need  not  include  in  the  discussion  those  short- 
period  guaranties,  required  by  many  cities,  to  the  effect 
that  any  defective  work  appearing  within  a  brief  period, 

134 


GUARANTEEING  PUBLIC   WORK  135 

usually  six  months,  must  be  made  good  at  the  expense 
of  the  contractor,  nor  those  which  require  that  machinery- 
furnished  shall  accomplish  stipulated  results.  Such 
guaranties  are  reasonable  and  proper,  and  there  can  be 
no  valid  objection  to  them.  Nor  is  it  intended  to  discuss 
such  guaranties  as  are  required  in  the  case  of  untried 
varieties  of  material,  or  novel  methods  of  doing  work,  the 
value  of  which  have  not  been  sufficiently  determined  by 
experience.  It  is,  undoubtedly,  proper  and  advisable  to 
require  that  the  advocate  or  promoter  of  a  new  material, 
or  a  new  method  of  performing  work,  shall  make  good 
his  faith  by  giving  a  satisfactory  guaranty.  In  fact, 
conditions  of  this  character  were  probably  responsible  for 
the  introduction  in  this  country  of  the  practice  of  requir- 
ing the  contractor  to  guarantee  his  work.  In  the  early 
history  of  asphalt  pavement,  as  constructed  in  this  coun- 
try, there  was  no  little  want  of  confidence  in  the  pave- 
ment, and  much  misgiving  as  to  its  durability.  Its 
promoters  had  great  confidence  in  it,  and  were  quite 
willing  to  meet  the  popular  distrust  by  offering  to  main- 
tain the  pavements  for  a  period,  usually  five  years,  after 
their  construction,  and  to  guarantee  that  the  work  would 
be  in  good  condition  at  the  end  of  that  period.  The 
practice  thus  begun  was  adhered  to  after  the  character 
and  durability  of  the  pavement  became  well  established, 
and  is  still  persisted  in,  and  it  has  become  common  to 
require  similar  guaranties  upon  other  kinds  of  pavement, 
and  also,  to  some  extent,  upon  work  other  than  street 
pavement. 

The  general  theory  upon  which  the  contractor  is  re- 
quired to  guarantee  the  work  done  by  him  for  a  period  of 


136  MUNICIPAL   PUBLIC  WOliKS 

years  is,  that  under  such  a  requirement  the  responsibility 
for  the  good  and  sufficient  quality  of  the  work  done  and 
the  materials  used,  is  largely  shifted  from  the  city  to  the 
contractor,  since  his  self-interest  must  compel  him  to  per- 
form his  work  in  the  best  possible  manner,  in  order  that 
it  may  endure  through  the  period  guaranteed,  and  be 
accepted  by  the  municipality  at  the  expiration  of  the 
period.  It  is  argued  that  under  such  a  requirement  the 
contractor  cannot  afford  to  slight  his  work,  because 
the  consequences  will  eventually  fall  upon  him,  and  he  and 
not  the  municipality  will  suffer  for  any  carelessness  or 
bad  work  that  he  may  allow. 

In  actual  practice,  as  we  shall  note  later,  the  guaranty 
requirement  has  been  made  to  cover  a  much  larger  field 
than  the  construction  of  the  work  in  a  proper  man- 
ner and  with  proper  material,  and  in  most  cases  it 
now  amounts  to  a  contract  to  maintain  the  work  for  the 
period  named,  and  in  not  a  few  cases  to  the  assumption  of 
the  risk  of  accidents  and  unforeseen  causes  of  deteriora- 
tion for  which  the  contractor  cannot  reasonably  be  held 
responsible. 

Without  at  present  questioning  the  soundness  of  this 
general  theory,  let  us  examine  its  practical  workings  and 
endeavor  to  determine  whether  or  not  the  municipality 
receives  in  the  end  any  substantial  benefit  therefrom. 

In  the  first  place,  it  must  be  recognized  that  the  value 
of  such  a  guaranty  will  depend  upon  the  ability  of  the 
municipality  to  enforce  compliance  with  its  terms.  To 
insure  such  compliance,  two  methods  are  in  common  use. 
One  of  these  is  to  withhold  from  the  contractor  a  part  of 
the  money  that  would  otherwise  be  due  him  on  the  com- 


GUARANTEEING   PUBLIC   WORK  137 

pletion  and  acceptance  of  the  work,  until  the  guaranty 
has  expired.  This  method  will  prove  effective  if  the  sum 
retained  is  large  enough  to  constitute  a  sufficient  surety. 
In  practice,  in  contracts  for  street-paving,  the  amount 
retained  is  usually  some  per  centum  of  the  whole  cost  of 
the  work.  In  contracts  requiring  a  guaranty  for  five 
years,  the  usual  amount  retained  is  ten  per  cent  of  the 
value  of  the  contract.  Assuming  that  the  contractor  will 
be  governed  by  purely  mercenary  motives,  he  may  be 
depended  upon  to  make  good  the  guaranty,  and  do  all 
work  necessary  for  its  integrity,  provided  the  cost  to  him 
of  doing  so  will  be  less  than  the  sum  he  will  receive  at  the 
expiration  of  the  period.  If,  however,  he  finds  that  the 
cost  of  maintaining  the  work  will  exceed  that  sum,  it  will 
obviously  be  to  his  interest,  aside  from  any  question  of 
business  honor,  or  any  care  for  his  business  reputation,  to 
default,  and  unless  the  municipality  has  other  surety  in 
addition  to  the  ten  per  cent  retained,  it  will,  as  a  rule, 
have  no  power  to  compel  him  to  make  good  the  guaranty. 
It  is  evident,  therefore,  that  the  sum  retained  must  be 
sufficiently  large  to  insure  that  the  contractor  will  find  it 
to  his  interest  to  maintain  the  guaranty  rather  than  to 
forfeit  the  money  retained.  But  in  the  case  of  carelessly 
or  improperly  constructed  street  pavements,  it  is  not 
unusual  that  the  work,  if  the  period  of  guaranty  is  long, 
must  be  extensively  repaired  or  even  reconstructed  during 
the  guaranteed  period,  and  it  may  occur  that  the  cost  of 
repairs  or  reconstruction  will  almost,  if  not  quite,  equal 
the  original  contract  price ;  and  the  cases  are  quite  fre- 
quent where  it  will  equal  one-half  that  price.  If,  then, 
the  municipality  is  to  be  fully  secured,  it  would  seem  that 


138  MUNICIPAL  PUBLIC   WORKS 

not  less  than  fifty  per  cent  of  the  contract  price  must  be 
retained.  But  if  one-half  the  value  of  the  contract  is  to 
be  withheld  from  the  contractor  until  the  expiration  of  the 
guaranty  period,  it  is  evident  that  only  those  with  a  large 
surplus  of  capital  can  undertake  work  of  any  considerable 
magnitude  at  prices  yielding  no  more  than  a  reasonable 
profit,  since  the  sum  left  in  the  hands  of  the  municipality 
would  soon  cripple  the  resources  of  those  of  moderate 
means ;  and  under  such  conditions  this  class  of  contractors 
must  either  decline  to  undertake  contracts,  thus  limiting 
competition,  or  they  must  bid  prices  that  are  sufficiently 
high  to  at  least  meet  the  actual  cost  of  the  work  out  of 
the  immediate  proceeds.  In  either  case  the  result  is 
likely  to  be  disadvantageous  to  the  city,  since  it  is  not 
good  policy  to  stifle  competition  by  shutting  out  the  con- 
tractor of  small  means,  who  may  be  otherwise  acceptable, 
nor  to  pay  higher  prices  for  work  than  are  sufficient  to 
afford  a  reasonable  profit. 

The  other  method  referred  to  is  to  require  the  con- 
tractor to  give  bond  in  a  sufficient  sum  to  cover  all  possi- 
ble liability.  As  such  a  bond  must  run  for  a  period  of 
years,  personal  sureties  cannot  be  safely  relied  upon,  since 
an  individual  who  is  wealthy  to-day  may  be  a  pauper 
before  the  end  of  five  years  ;  and  the  only  reliable  surety 
must  be  that  furnished  by  responsible  surety  companies. 
These  companies  are  naturally  averse  to  underwriting 
bonds,  even  for  contractors  financially  strong,  extending 
over  long  periods  of  time  and  involving  many  uncertain- 
ties; and  if  they  do  so,  they  charge  high  rates  for  the  ser- 
vice, which  must  be  paid  by  the  contractor.  He  must, 
therefore,  necessarily  charge  such  prices  for  his  work  as 


GUARANTEEING  PUBLIC  WORK  139 

will  yield  a  sufficient  sum  above  reasonable  profit  to  meet 
these  charges.  There  seems  to  be  no  practicable  way  by 
which  the  carrying  out  of  the  guaranty  can  be  assured 
except  by  the  imposition  of  a  very  heavy  burden  on  the 
guarantor,  and  the  experience  of  many  cities  has  proved 
conclusively  that  the  benefit  expected  from  a  guaranty  is 
liable  to  prove  illusive,  unless  it  is  backed  up  by  an 
amount  of  surety  that  the  contractor  cannot  afford  to  fur- 
nish without  receiving  very  high  prices.  That  forfeits 
under  guaranty  clauses  have  been  less  common  than 
might  be  expected,  is  due  largely  to  the  circumstance 
that  the  work  to  which  the  guaranty  has  been  most  fre- 
quently applied  —  asphalt  pavements  —  has  been  mostly 
done  by  large  and  responsible  companies,  whose  interest 
in  the  business  and  its  future  would  compel  them  to 
live  up  to  their  engagements,  even  were  they  otherwise 
disposed. 

It  has  been  claimed  that  contractors  add  little,  if  any- 
thing, because  of  the  guaranty  requirement,  to  the  prices 
they  would  otherwise  name ;  but  the  claim  is  untrue  in 
fact.  That  the  maintenance  of  the  guaranty  always  costs 
something,  and  that  in  many  cases  the  cost  amounts  to  a 
large  percentage  of  the  contract  price,  is  proved  by  the 
experience  of  every  contractor,  and  must  be  obvious  to 
any  one.  To  contend  that  good  business  men,  as  most  of 
these  contractors  are,  do  not  consider  this  item  of  cost  in 
framing  their  bids,  and  make  a  liberal  allowance  therefor, 
is  absurd.  It  is  true  that  the  exigencies  of  sharp  compe- 
tition and  a  desire  to  control  the  business  may  often  impel 
them  to  name  very  low  prices,  which  apparently  ignore 
the  guaranty  ;  but  experience  has  taught  them  that  the 


140  MUNICIPAL  PUBLIC  WORKS 

cost  of  maintenance  is  an  inevitable  burden  that  they  can- 
not hope  honorably  to  escape. 

It  is  very  difficult  to  estimate  in  advance  the  cost  of 
maintaining  a  pavement  for  a  period  of  years.  The  con- 
tractor who  undertakes  it  must,  if  he  is  prudent,  figure 
safely,  and  he  will,  therefore,  if  he  expects  to  stand  by  his 
guaranty,  estimate  the  item  at  its  maximum  cost.  He 
will  be  aware  that  the  volume  and  weight  of  travel  on  any 
street  before  it  is  paved,  may  be  no  indication  of  what  it 
may  become  after  the  improvement  is  completed,  particu- 
larly if  the  parallel  streets  are  not  also  paved.  Instances 
in  large  cities  might  be  given  where  streets  with  light 
travel  and  unimportant  business  have,  after  being  paved, 
and  before  the  expiration  of  the  guaranty  period,  become 
leading  business  thoroughfares,  and  their  volume  of  travel 
increased  tenfold.  The  contractor  will  be  aware  that  in 
our  growing  American  cities  no  one  can  safely  predict 
what  changes  will  take  place  in  the  character  and  quantity 
of  travel  on  a  street  in  a  period  of  five  years,  and  much 
less  in  a  period  of  ten  or  more  years,  and  he  will  know 
that  it  is  quite  impossible,  therefore,  to  estimate  with  any 
degree  of  accuracy  what  the  cost  of  maintenance  will  be 
during  such  periods.  The  experience  of  the  large  asphalt- 
paving  companies  has  taught  them  how  dangerous  and 
unsatisfactory  such  estimates  may  be ;  and  while  in  their 
large  business  covering  hundreds  of  streets  in  various 
cities,  the  general  average  cost  of  maintenance  has  not 
differed  very  widely  from  their  expectations,  many  single 
streets  might  be  named  upon  which  the  cost  of  mainte- 
nance has  so  greatly  exceeded  reasonable  anticipations 
that    the    result    must    have    meant    bankruptcy    to    a 


GUARANTEEING   PUBLIC   WORK  141 

contractor  of  moderate  means.  It  is  safe  to  say  that 
experience  has  shown  and  will  continue  to  show  to  con- 
tractors, the  difficulty  of  foreseeing  and  estimating  the 
cost  of  maintenance  of  pavements,  and  that  the  tendency 
among  them  is  to  increase  this  item  of  cost  in  order  to 
allow  a  safe  margin  for  unforeseen  increase  of  wear  and 
tear.  It  must  be  evident,  therefore,  that  the  municipality 
must  pay  at  a  liberal  rate  for  the  benefit  that  the  guaranty 
is  supposed  to  give.  Under  these  conditions  it  is  more 
than  doubtful  if  the  municipality  gains  anything  by 
requiring  long  period  guaranties.  It  would  seem  better 
from  a  business  point  of  view  to  separate  maintenance 
from  construction,  and,  if  it  is  thought  best  to  have  pave- 
ments maintained  by  contract,  to  make  separate  contracts 
for  the  maintenance  of  each  street  for  a  comparatively 
short  period,  which  should  never  exceed  five  years. 

There  is  another  feature  of  guaranties  that  must  be 
considered.  If  a  contractor  is  required  to  maintain  a 
pavement  for  a  period  of  years,  care  must  be  taken  by 
the  municipality  to  do  nothing  itself,  and  to  prevent  others 
from  doing  anything,  that  will  relieve  the  contractor  from 
his  obligation.  For  instance,  the  municipality  may  not 
itself,  nor  may  it  permit  others,  to  remove  and  then 
repair  parts  of  a  guaranteed  pavement  for  the  purpose 
of  constructing  railroads,  sewers,  or  other  underground 
structures,  since  not  only  may  the  contractor  assert,  and 
often  truly,  that  the  adjoining  pavement  was  injured  in 
the  operation,  but  he  may  claim  that  defects  appearing 
in  the  future  may  be  within  that  part  of  the  street  dis- 
turbed and  repaired  by  parties  other  than  himself,  and  for 
which,  therefore,  he  cannot  be  held  responsible  ;  and  it  is 


142  MUNICIPAL   PUBLIC  WORKS 

generally  difficult,  if  not  impossible,  to  locate  accurately, 
after  the  lapse  of  a  year  or  two,  the  repairs  made  by  those 
other  parties.  It  is  therefore  found  advisable  to  couple 
with  the  guaranty  requirement  a  provision  that  the 
guarantor  shall  make  all  required  replacements  at  a 
stipulated  price.  This  price  may  be  fair  and  reasonable 
at  the  time  it  is  made,  but  during  the  life  of  the  guaranty 
prices  may  greatly  decline,  so  that  the  contractor  may 
receive  exorbitant  compensation  for  all  the  repair  work 
to  be  done.  It  is  well  known  that,  owing  to  the  great 
decline  in  prices  of  asphalt  pavement  during  the  past  few 
years,  many  cities  are  paying,  and  must  continue  to  pay 
for  many  years  to  come,  under  existing  guaranty  con- 
tracts, very  much  higher  prices  for  repairs  than  those 
prevailing  at  the  present  time.  It  is  true  that  repairs  of 
this  character  are  usually  paid  for  by  the  private  persons 
for  whose  benefit  they  are  made,  and  not  by  the  munici- 
pality, but  the  loss  falls  on  citizens  whose  interests  it  is 
the  duty  of  the  municipality  to  protect  as  far  as  practi- 
cable. It  is  true  also  that  the  movement  of  prices  might 
be  in  the  opposite  direction,  in  which  case  the  guarantor 
would  have  to  shoulder  the  loss,  and  the  municipality  or 
its  citizens  would  reap  the  benefit ;  but  this  does  not  invali- 
date the  conclusion  it  is  desired  to  present,  —  that  it  is 
not  wise  to  make  contracts  extending  over  a  long  period 
of  time  for  services  or  supplies  the  market  price  of  which 
is  liable  to  fluctuate  within  wide  limits. 

In  view  of  all  the  facts,  it  may  therefore  well  be  ques- 
tioned whether,  in  the  end,  the  municipality  is  not  the 
loser  rather  than  the  gainer  through  the  operation  of 
guaranties  on  public  work.    Whatever  may  be  the  answer 


GUARANTEEING  PUBLIC  WORK  143 

to  this  question,  it  is  worth  while  to  inquire  if  the  end 
aimed  at  cannot  be  attained  by  some  other  means  less 
objectionable  to  all  parties  concerned. 

Assuming  that  the  work  contemplated  is  of  an  ordinary 
and  well-known  kind,  or  in  other  words  that  it  is  not  of 
an  experimental  character ;  that  the  quality  of  the  mate- 
rials used  can  be  readily  determined  ;  and  that  the  degree 
of  skill  and  the  character  of  workmanship  necessary  to 
do  the  work  properly  are  understood  by  the  city's  agents; 
and  assuming  further  that  the  work  will  be  awarded  to 
a  contractor  of  known  character  and  responsibility,  and 
that  during  its  progress  it  will  be  properly  supervised  and 
inspected  by  the  agents  of  the  municipality,  there  should 
be  no  difficulty  in  securing  its  performance,  so  far  as 
materials  and  workmanship  are  concerned,  in  a  satisfac- 
tory manner.  Especially  may  this  result  be  expected 
when  it  is  remembered  that  work  done  under  a  guaranty 
is  not  so  likely  to  be  carefully  inspected,  because  the 
contractor,  in  that  case,  is  supposed  to  assume  the  greater 
responsibility  for  the  quality  of  the  work. 

In  this  connection  it  must  be  remembered  that  there 
must  always  be  a  question  as  to  how  far  the  municij)ality 
may  dictate  to  a  contractor  who  is  required  to  guarantee 
his  work.  The  contractor  may  claim  that  if  he  is  to  be 
held  responsible  for  results,  he  must  be  free  to  exercise 
his  judgment  as  to  the  best  means  of  securing  those 
results,  and  that  if  the  municipality  assumes  to  dictate 
methods,  he,  the  contractor,  cannot  be  justly  held  respon- 
sible for  results. 

The  question  of  the  legality  of  long-time  guaranties 
has  been  often  raised  and  deserves  careful  consideration. 


144  MUNICIPAL   PUBLIC  WORKS 

Where  public  work,  and  particularly  street-paving,  is 
paid  for  partly  or  wholly  by  special  assessments,  the 
laws  almost  invariably  provide  that  the  cost  of  construc- 
tion alone  may  be  assessed  upon  the  property  owners 
benefited,  and  it  is  either  expressly  or  by  implication 
provided  that  the  cost  of  maintaining  the  work,  after  it 
is  constructed,  shall  be  met  from  the  general  funds.  It 
is  therefore  necessary  to  distinguish  between  repairs  that 
may  become  necessary  because  of  faulty  materials  or 
workmanship,  and  those  which  will  inevitably  become 
necessary  because  of  the  wear  and  tear  of  use,  however 
well  the  work  of  construction  may  have  been  done.  This 
latter  class  of  repairs  may  properly  be  called  maintenance. 
But  the  guaranty  clauses  in  use  in  most  cities  are  so 
drawn  as  to  compel  the  guarantor  to  maintain  the  work 
in  good  condition  during  the  period  of  guaranty,  regard- 
less of  whether  it  was  properly  constructed  or  not ;  and 
it  cannot  be  doubted  that  the  contractor  in  framing  his 
bid  for  the  work  adds  to  the  price  of  construction  a  cer- 
tain sum  to  cover  the  cost  of  such  maintenance.  In  other 
words,  the  bid  is  made  up  of  a  certain  sum  for  construc- 
tion, and  a  certain  other  sum  for  the  maintenance  required 
by  the  guaranty.  The  property  owner  who  may  willingly 
consent  to  be  assessed  for  the  construction  of  the  im- 
provement, may  object  to  having  the  cost  of  maintenance 
specially  assessed  upon  his  property.  A  number  of  cases 
involving  this  question  have  been  brought  before  the 
courts,  and  a  large  majority  of  the  decisions  have  been 
to  the  effect  that  contracts  containing  guaranties  which 
involve  maintenance  of  the  completed  work,  are  null  and 
void.     The   decisions   to   the    contrary  effect   are   based 


GUARANTEEING   PUBLIC   WORK  145 

upon  the  argument  that  the  terms  of  the  guaranty  do 
not  necessarily  require  the  maintenance  of  the  work,  in 
the  proper  sense  of  that  word ;  but  only  that  the  guarantor 
shall  do  the  work  in  such  a  manner  that  maintenance  will 
not  become  necessary  within  the  time  stipulated  ;  and  if 
it  shall  become  necessary  to  expend  money  for  repairs, 
the  fact  is  to  be  regarded  as  evidence  that  the  contractor 
did  not  perform  the  work  in  the  manner  required,  and 
must,  therefore,  make  good  the  consequences  of  his  fail- 
ure. While  this  reasoning  may  possibly  be  accepted  as 
satisfactory  in  theory,  every  man  of  practical  experience 
knows  that  it  is  not  justified  in  fact,  since  almost  no  street 
pavement  subjected  to  even  moderately  heavy  travel  will 
endure  for  a  period  of  five  years,  much  less  for  a  longer 
period,  without  expenditures  for  repairs  that  are  clearly 
chargeable  to  maintenance,  and  which  no  fair-minded 
person  could  attribute  to  defective  construction.  This  is 
tacitly  admitted  in  many  guaranty  contracts  by  the  use 
of  the  familiar  phrase  "  ordinary  wear  and  tear  excepted," 
but  this  limitation  increases  rather  than  diminishes  the 
difficulty.  Who  is  to  decide,  who  can  decide,  whether 
repairs  made  are  due  to  original  defects  in  material  and 
workmanship  or  to  ordinary  wear  and  tear  ? 

The  fact  is  not  overlooked  that  it  may  be  proper  and 
legally  permissible  to  require  a  guaranty  that  a  street 
pavement  shall  endure  a  certain  amount  of  service  and 
shall  retain  a  capacity  for  further  service  ;  but  unless  the 
required  service  be  clearly  defined  in  unmistakable  terms, 
who  can  say  when  the  conditions  have  been  met  ?  A 
contract  for  a  dozen  eggs  is  definite,  but  one  for  a 
basket   of  eggs  is  not.      So  a  contract  requiring  that  a 


146  MUNICIPAL   PUBLIC   WORKS 

pavement  must  be  capable  of  carrying  so  many  tons  of 
travel  would  be  definite;  but  one  that  requires  that  it 
shall  carry  all  the  travel  that  may  come  upon  it  for  a  cer- 
tain period  of  years,  regardless  of  the  fact  that,  even  if 
the  present  quantity  of  travel  be  known,  no  idea  can  be 
formed  of  what  it  may  become  during  that  period,  is 
neither  definite  nor  just.  There  must  be  some  fairly  defi- 
nite quantity  of  travel  that  the  pavement  may  be  reasona- 
bly expected  and  guaranteed  to  carry  without  deterioration. 
Any  additional  quantity  will  make  repairs  necessary  that 
cannot  be  said  to  be  due  to  any  want  of  integrity  in  the 
work.  Such  repairs  are  clearly  chargeable  to  mainte- 
nance; and  if  the  provisions  of  the  law  are  to  be  coiliplied 
with,  their  cost  must  not  be  specially  assessed  against  the 
property  owners.  How  shall  the  proper  division  be 
made  ?  Take  another  view  of  the  matter.  The  guar- 
anty clause,  as  usually  framed  and  used,  is  made  to  apply 
uniformly  to  all  —  or  at  least  to  many  streets  of  the  same 
city.  But  it  must  be  obvious  that  on  some  of  these 
streets,  while  the  actual  cost  of  constructing  the  i)ave- 
ment  will  be  the  same,  the  cost  of  maintaining  (z.g.  guar- 
anteeing them)  will  be  much  greater  than  on  others,  and 
the  contractor  would  make  a  corresponding  difference  in 
the  prices  he  would  bid.  To  illustrate :  two  parallel 
streets  of  equal  width  are  to  be  paved,  and  contracts  for 
the  work  are  entered  into,  requiring  that  the  contractor 
shall  guarantee  the  pavements  for,  say,  five  years.  The 
contractor  proceeds  to  execute  tlie  work,  using  exactly  the 
same  materials,  employing  tlie  same  skill,  and  exercising 
the  same  care  in  the  case  of  eacli,  so  that  when  the  work 
is  completed,  the  pavements  are  identical  in  all  essential 


GUARANTEEING   PUBLIC   WORK  147 

respects.  They  should,  therefore,  be  capable  of  enduring 
the  same  service  under  similar  conditions.  But  one  of  the 
streets  is,  and  will  continue  to  be,  subjected  to  three  times 
as  much  travel  as  the  other,  and  that  travel  is  of  a  much 
more  destructive  character.  It  is  inevitable  that  the 
effects  of  wear  and  tear  upon  the  one  will  be  at  least 
three  times  as  great  as  on  the  other.  It  may  be  that  the 
quantity  of  wear  and  tear  upon  the  lighter-travelled 
street  will  be  such  that  the  pavement  will  just  endure  to 
the  end  of  the  guaranty  period  without  repairs,  and  be  in 
acceptable  condition  at  its  expiration.  If  so,  the  pave- 
ment on  the  other  street,  having  performed  three  times  as 
much  service,  will  have  required  extensive  repairs,  and 
will  need  to  be  virtually  reconstructed  before  its  condi- 
tion will  conform  to  the  guaranty  requirements.  If  the 
contractor  was  aware  of  all  the  facts  when  he  submitted 
proposals  to  pave  the  two  streets,  and  if  he  based  his 
prices  upon  what  the  work  would  finally  cost  him,  he 
doubtless  bid  a  much  lower  price  for  the  one  than  for  the 
other.  Why  did  he  do  so  ?  Was  it  not  clearly  because 
he  had  reason  to  believe  that  on  the  one  pavement  he 
might  expect  that  after  the  construction  was  completed  he 
would  be  at  the  expense  only  of  remedying  such  defects 
as  may  always  be  found  to  have  crept  into  the  work,  while 
upon  the  other  he  must  expect  to  expend  a  large  sum  of 
money  for  repairs  made  necessary  by  the  wear  of  the 
heavy  travel  ?  And,  if  so,  is  it  not  evident  that  the  dif- 
ference in  price  is  fairly  chargeable  to  the  maintenance 
of  the  pavement  on  the  heavier-travelled  street  ?  It  is 
almost  certain  that  the  property  owner  on  that  street 
would  take  that  view  of  the  matter,  and  might  appeal  to 


148  MUNICIPAL  PUBLIC  WORKS 

the  courts  for  redress.  No  such  case  has,  I  believe,  been 
passed  upon  by  the  courts,  but  it  is  difficult  to  conceive 
how,  on  the  facts  presented,  they  could  fail  to  support  the 
view  of  the  complaining  property  owner. 

Some  of  the  decisions  of  the  courts  that  have  upheld 
the  validity  of  guaranty  contracts  in  cases  where  it  has 
been  claimed  that  they  involved  maintenance  do  not  im- 
press the  ordinary  reader  as  being  either  candid  or  as 
going  deeply  into  the  equity  of  the  question.  They  give 
the  impression  that  they  are  founded  on  fine-spun  legal 
theories  rather  than  upon  a  broad  and  comprehensive  view 
of  the  actual  facts,  and  that  the  nice  distinctions  attempted 
to  be  made  are  far-fetched  and  irrational.  As  before 
remarked,  the  number  of  decisions  of  the  higher  courts 
covering  this  question  is  comparatively  small,  and  a  ma- 
jority of  these  decisions  have  been  against  the  validity  of 
guaranty  contracts.  In  most  of  the  States  the  question 
seems  not  yet  to  have  been  brought  before  the  courts,  and 
is  therefore  undecided.  It  is  safe  to  say  that  in  the  great 
majority  of  our  cities  the  question  of  the  possible  invalidity 
of  the  guaranty  contracts  now  common  has  not  received 
the  attention  it  deserves.  The  large  companies  by  which  a 
considerable  part  of  the  asphalt  pavements  in  American 
cities  have  been  constructed,  have,  for  reasons  of  their 
own,  been  disposed  to  submit  to  questionable  guaranty 
requirements  rather  than  to  have  the  practice  of  requiring 
guaranties  abolished  ;  l)ut  many  who  are  best  informed  on 
the  subject  do  not  believe  that  the  present  practice  could 
survive  a  serious  onslaught  upon  it  in  the  courts.  A 
sweeping  decision  tliat  sucli  guaranties  are  illegal  would 
be  a  severe  blow  to  municipal  cor[)orations  that  have  out- 


GUARANTEEING  PUBLIC  WORK  149 

standing  a  large  number  of  such  contracts,  involving  large 
sums  of  money  ;  and  common  prudence  would  seem  to 
dictate  greater  caution  in  the  matter  than  has  heretofore 
been  exercised. 

What  is  said  above  upon  the  legal  aspects  of  guaran- 
ties applies,  of  course,  only  to  those  cities,  or  those 
cases,  where  the  cost  of  the  work  is  specially  assessed 
upon  the  property  owners.  Where  the  work  is  paid 
for  from  the  general  funds,  contracts  clearly  involving 
maintenance  to  any  extent  or  for  any  number  of  years 
are,  without  doubt,  entirely  valid,  and  in  these  cases  the 
question  of  requiring  a  guaranty  is  purely  one  of 
expediency. 

Where  guaranties  extending  over  a  period  of  years  are 
required,  it  is  important  that  the  guaranty  clauses  of  the 
contract  should  be  more  carefully  drawn  than  has  been 
customary  in  most  cases  in  the  past.  While  they  should 
clearly  and  explicitly  define  what  the  contractor  is  expected 
to  do,  it  is  advisable  to  omit  impracticable  and  unreasonable 
requirements  which  the  municipality  may  not  be  able  to 
enforce,  and  to  avoid,  as  much  as  possible,  the  contin- 
gency of  legal  complications.  The  decisions  of  the  courts 
indicate  that  where  work  is  paid  for  from  special  assess- 
ments, a  clear  distinction  must  be  drawn  between  repairs 
made  necessary  by  the  use  of  improper  materials  and 
workmanship,  and  those  that  may  be  properly  classed  as 
maintenance  of  the  work.  Such  a  distinction  is  not  easy 
to  define  precisely,  and  its  practical  application  is  a  matter 
of  very  great  difificulty.  In  the  case  of  a  street  pavement, 
for  instance,  repairs  may  become  necessary  from  any  one 
of  the  following  causes  :  — 


150  MUNICIPAL   PUBLIC   WORKS 

1.  The  failure  of  the  contractor  to  do  the  work  properly 
and  skilfully  with  suitable  material  and  workmanship. 

2.  The  cutting  out  of  the  pavement  for  the  construction 
and  repair  of  other  structures. 

3.  The  accidental  or  malicious  destruction  of  or  injury 
to  the  pavement. 

4.  The  wear  and  destruction  of  the  pavement  by  use, 
which  will  occur  to  a  greater  or  less  extent,  however  well 
the  work  may  originally  have  been  done. 

In  the  first  case  there  can  be  no  question  about  the 
duty  of  the  contractor  to  make  all  necessary  repairs 
under  his  guaranty.  In  the  second,  it  is  universally 
admitted  that  the  repairs  should  not  be  covered  by  the 
guaranty,  and  that  the  contractor  is  entitled  to  compen- 
sation therefor.  In  the  third  case  it  is  not  only  unwise  but 
unjust  to  require  a  contractor  to  make  repairs  caused  by 
accidental  or  malicious  injuries  to  a  pavement.  While 
most  cities  seek  to  avoid  including  such  repairs  in  guar- 
anty contracts,  there  are  not  a  few  where  the  language  of 
the  guaranty  still  includes  them,  and  where  it  is  seriously 
insisted  that  the  contractor  shall  make  good  injuries  of  this 
character.  Neither  the  corporation  nor  the  contractor  can 
foresee  or  provide  against  such  accidental  injuries  to  the 
work,  and  the  contractor  has  no  police  power  to  prevent 
the  destruction  of  the  work  by  its  improper  use,  whether 
the  result  of  malice  or  carelessness.  Among  accidental 
causes  of  injury  may  be  named  the  breaking  of  water  mains, 
the  collapse  of  sewers,  great  fires  along  the  street,  etc. 
Protection  against  losses  of  this  character  is  the  function 
of  insurance  companies  rather  than  of  contractors. 

Among  other  causes  of   failure  of  pavements  may  be 


GUARANTEEING   PUBLIC   WORK  151 

named  the  settling  of  trenches  made  by  other  persons 
under  the  direction  of  the  municipality,  but  over  the 
refilling  of  Avhich  the  paving  contractor  had  no  control  ; 
the  hauling  of  excessive  and  unlawful  loads  over  the 
street ;  and,  in  the  case  of  asphalt  pavements,  the  escape 
of  gas  from  the  mains,  and  the  building  of  bonfires  on  the 
street.  The  municipality  alone  has  the  power  to  prevent 
these  things,  and  should,  therefore,  bear  the  responsibility 
for  them  ;  and  while  the  contractor  may,  for  various  rea- 
sons, consent  to  make  such  repairs  under  his  guaranty, 
there  can  be  little  doubt  that  if  he  chose  to  contest  the 
question,  the  courts  would  sustain  him. 

It  seems  clear,  therefore,  that  the  only  repairs  which 
the  contractor  for  constructing  a  pavement  may  be  fairly 
required  to  make,  under  a  guaranty,  are  those  which  may 
result  from  failure  on  his  part  to  use  suitable  materials, 
and  to  do  the  work  in  a  skilful  and  proper  manner,  in 
accordance  with  the  provisions  of  the  contract ;  or  from 
the  failure  of  the  pavement  to  endure  a  stipulated  amount 
of  use.  If  it  were  possible  clearly  to  distinguish  repairs 
made  necessary  by  defective  materials  and  workmanship 
from  all  others,  and  to  define  and  measure  the  amount  of 
use  expected  of  a  pavement,  it  would  be  a  comparatively 
simple  matter  properly  to  frame  the  guaranty  provisions 
of  the  contract ;  but  unfortunately  it  is  difficult,  if  not 
practically  impossible,  to  do  so.  This  is  well  recognized, 
and  both  municipality  and  contractor  understand  that  the 
guaranty  requires  that  the  pavement  is  to  be  maintained 
in  good  condition  during  the  whole  period,  even  if  the 
repairs  required  are  clearly  due  to  travel,  and  not  to 
defective  material  or  unskilful  work. 


152  MUNICIPAL   PUBLIC   WORKS 

It  is  probable  that  the  practice  of  requiring  the  con- 
tractor to  give  some  kind  of  a  guaranty  upon  street-pav- 
ing work  has  become  too  deeply  rooted  to  permit  of  its 
abandonment,  unless  the  courts  in  the  States  generally 
shall  pronounce  it  illegal,  and  even  then  some  modified 
form  of  it,  not  forbidden  by  the  law,  will  probably  be 
adhered  to.  It  cannot  be  denied  that  the  principle  of  the 
guaranty  has  jDoints  of  real  merit,  and  possesses  features 
that  will  continue  to  make  it  attractive  while  municipal 
contracting  is  in  its  present  demoralized  condition.  It 
may  be  well,  therefore,  to  inquire  how  far  its  merito- 
rious features  may  be  safely  retained  without  danger  of 
successful  attack  in  the  courts,  and  how  its  benefits 
may  be  retained  while  avoiding  the  objectionable  features 
of  present  practice.  The  writer  believes  that  this  may  be 
accomplished  by  separating  the  guaranty  proper  from  any 
complication  with  questions  of  maintenance.  It  is  uni- 
versally conceded  that  a  guaranty  may  extend  over  a 
period  sufficiently  long  to  disclose  defects  of  workman- 
ship and  material,  and  yet  not  so  long  as  to  involve 
questions  of  maintenance,  without  any  danger  of  legal 
complications.  No  question  has  ever  been  raised  as  to 
the  propriety  and  legality  of  those  short-term  guaran- 
ties common  in  contracts  for  some  varieties  of  public 
work,  as,  for  instance,  pumping  machinery.  They  serve 
simply  to  disclose  defects  of  construction  or  operation 
that  could  not  be  discovered  in  any  other  way.  They 
would  be  as  unobjectionable  in  the  case  of  street  pave- 
ments as  in  any  other  kind  of  work.  The  practical  ques- 
tion is.  What  should  be  the  length  of  the  period  of  trial 
in  order,  on  the  one  hand,  that  defects  may  be  disclosed, 


GUARANTEEING  PUBLIC   WORK  153 

and,  on  the  other,  that  no  question  of  maintenance  may- 
be raised  ?  This  period  may  differ  with  the  kind  of  pave- 
ment and  the  conditions  to  which  it  is  exposed;  but  it 
may  be  safely  assumed  that  any  faults  of  material  and 
workmanship  should  appear  within  two  years,  and  that 
any  standard  pavement  should  ordinarily  require  no  main- 
tenance repairs  within  that  period.  Qualities  of  endur- 
ance could  not,  usually,  be  ascertained  within  that  time  ; 
but  a  time  standard  is  not  the  proper  one  to  be  applied  in 
the  determination  of  that  quality  in  any  case.  When  we 
consider  that  some  streets  carry  more  travel  in  one  year 
than  others  do  in  twenty  years,  the  absurdity  of  apply- 
ing a  fixed-time  standard  to  measure  their  endurance 
must  be  apparent.  Nor  is  it  practicable  to  attempt 
to  graduate  the  length  of  the  period  by  the  amount 
of  travel  on  a  street  before  it  is  paved,  since  that 
travel  may  increase  very  greatly  after  the  street  is 
paved  and  during  the  period  fixed.  It  is  known  that, 
excluding  the  effects  of  natural  decay,  which  may  gen- 
erally be  disregarded,  the  life  of  a  pavement  is  prac- 
tically measured  by  the  amount  of  travel  over  it. 
Roughly,  we  may  say  that  its  endurance  is  a  func- 
tion of  the  tons  of  horses  and  vehicles  it  carries. 
The  rational  way,  then,  to  define  the  endurance  of  a 
pavement,  is  to  stipulate  that  it  shall  carry  a  given 
number  of  tons  of  travel  without  showing  signs  of 
failure.  This  is  so  evident  that  it  will  not  be  dis- 
puted ;  but  the  objection  raised  to  this  method  is  the 
practical  difficulty  of  ascertaining  the  weight  of  travel. 
It  is  true  that  to  do  this  with  great  accuracy  would 
be   practically  impossible;    but    experience    has    shown 


154  MUNICIPAL   PUBLIC   WORKS 

that  it  may  be  determined  with  approximate  correct- 
ness, and  without  very  great  expense.  The  average 
weight  of  a  horse  is  known,  and  that  of  the  various 
classes  of  vehicles,  empty  and  loaded,  can  be  approxi- 
mately ascertained.  If,  then,  a  census  of  the  travel 
over  any  street  be  taken,  recording  the  number  of 
horses  and  the  number  of  vehicles  of  each  kind,  and 
noting  whether  they  are  empty  or  loaded,  the  weight 
of  the  whole  can  be  ai^proximately  computed.  If 
such  a  census  be  taken  on  a  number  of  stated  days 
in  the  year,  the  average  weight  of  travel  for  the  whole 
year  may  be  ascertained.  It  will,  of  course,  be  but  an 
approximation  to  the  truth,  but  it  will  furnish  a  measure 
of  the  work  done  by  the  pavement  and  its  endurance  that 
will  be  far  more  rational  and  reliable  than  the  rude  as- 
sumptions based  on  a  time  standard.  If  we  are  ever  to 
approach  a  reasonable  method  of  specifying  the  life  of 
pavements,  it  must  be  along  such  lines.  The  writer  has 
had  hundreds  of  such  censuses  of  travel  taken,  and  there- 
fore speaks  from  experience  as  to  their  practicability  and 
substantial  accuracy  in  determining  the  work  endured  by 
different  pavements.  The  data  thus  collected  would  be 
worth  much  more  than  they  would  cost  in  helping  to 
solve  problems  connected  with  street  pavements. 

It  is  doubtful,  however,  whether  it  is  either  necessary 
or  advisable,  or  even  desirable,  to  introduce  an  endurance 
requirement  in  guaranties  of  pavement  work.  We  know 
with  fair  approximation  the  relative  lasting  qualities  of 
the  several  kinds  of  standard  pavement,  and  it  is  prac- 
ticable to  frame  specifications  for  their  construction 
which,    if   carried   out,    will   insure   work    of   reasonable 


GUARANTEEING  PUBLIC  WORK  155 

uniformity  ;  and  the  agents  of  the  municipality  have  the 
necessary  practical  knowledge  to  enable  them  to  enforce 
such  specifications.  With,  then,  a  time  guaranty  cover- 
ing a  sufficiently  long  period  to  disclose  defects  of  con- 
struction that  may  have  been  overlooked,  we  might 
confidently  expect  very  satisfactory  results. 

But  if  it  shall  still  be  desired  to  make  the  contractor 
responsible  for  the  care  of  his  work  over  a  longer  period, 
this  may  be  accomplished  by  having  him  name  in  his  bid 
a  price  per  square  yard  per  year  at  which  he  will  keep 
the  pavement  in  repair  for  tlie  desired  number  of  years 
after  the  expiration  of  the  two  years  of  free  guaranty. 
If  there  should  exist  any  question  of  illegality,  the  cost 
of  such  repairs  could  then  be  paid  out  of  the  general 
fund,  the  cost  of  construction  only  being  specially  assessed 
against  the  property  owners.  Payment  for  the  repairs 
would  be  made  annually  or  quarterly,  as  the  repair  work 
should  be  done.  This  would  be  more  equitable  than  the 
present  practice,  where  the  cost  of  maintenance  being 
included  in  the  construction  price,  the  contractor  receives 
the  whole  amount  when  the  construction  is  completed. 

In  conclusion,  it  is  worth  repeating  that  this  whole 
matter  of  long-time  guaranties  upon  public  work,  and 
particularly  in  street-paving  contracts,  has  not  received 
the  attention  its  importance  warrants.  It  should  be 
carefully  threshed  out,  and  its  merits  and  demerits,  its 
benefits  and  dangers,  considered  from  the  standpoint 
of   the  future  as  well  as  from  that  of  the  present. 


CHAPTER   XII 

SPECIAL   ASSESSMENTS 

Special  assessments,  as  a  means  of  providing  payment 
for  municipal  public  work,  are  in  quite  general  use,  but 
the  legal  principles  which  vinderlie  their  theory  and 
practice  do  not  seem  to  be  very  well  understood  by  the 
public  and  by  many  city  officials.  Recent  opinions  of  the 
higher  courts  have  emphasized  the  importance  of  con- 
forming very  strictly  to  the  law  in  levying  and  collecting 
such  assessments,  and  it  is  believed  that  a  general  state- 
ment of  the  principles  involved  and  the  requirements  of 
the  law  relating  to  the  subject  may  be  of  interest  and 
value  to  those  for  whom  this  book  is  written. 

The  differing  statutes  of  different  states,  and  the  vary- 
ing provisions  of  municipal  ordinances  in  different  cities, 
make  the  subject  a  somewhat  complicated  one,  especially 
where  these  laws  and  ordinances  must  be  interpreted  in 
the  light  of  the  numerous  decisions  of  the  courts,  during 
the  greater  part  of  a  century  ;  but  the  basic  principles 
of  the  system  are  not  at  all  abstruse  or  difficult  of  compre- 
hension. 

A  special  assessment  may  be  defined  as,  "  A  compulsory 
contribution  paid  once  and  for  all  to  defray  the  cost  of  a 
specific  improvement  to  property,  undertaken  in  the  public 
interest,  and  levied  by  the  government  in  proportion  to 
the   special   benefits   accruing  to  the  property  owner."  ^ 

1  E.  R.  A.  Seligman,  Quarterhj  Journal  of  Economics,  April,  1893. 

156 


SPECIAL  ASSESSMENTS  157 

The  fact  that  such  levies  are  sometimes  made  payable 
in  instalments  at  different  times,  does  not  affect  the 
substantial  accuracy  of  this  definition. 

The  general  theory  upon  which  special  assessments  are 
justified  and  enforced  may  be  briefly  stated  thus  :  Mu- 
nicipal corporations  are  clothed  with  authority  to  make 
certain  public  improvements.  These  improvements  are 
primarily  made  for  the  benefit  of  the  community  at  large  ; 
but  it  will  often  occur  that  certain  parts  of  the  community, 
or  certain  persons,  will  necessarily  be  benefited  by  the  im- 
provement more  than  others.  Thus  the  paving  of  a  street 
is  warranted  by  the  fact  that  it  is  demanded  by  the  interest 
of  the  public  as  a  whole.  But  if  A  owns  property  lying 
directly  on  this  street,  and  B's  property  is  situated  several 
blocks  away  from  it,  it  is  obvious  that  A  will  receive  more 
direct  benefit  from  the  improvement  than  will  B.  It  may 
even  happen  that  B  will  receive  no  direct  palpable  benefit 
at  all,  while  the  value  of  the  property  of  A  may  be  very 
largely  increased  thereby.  It  is  therefore  just  that  A 
should  pa}^  a  larger  share  of  the  cost  of  the  work  than  B. 
To  distribute  that  cost  equitably  in  proportion  to  the 
benefits  realized  is  quite  impossible  where  the  cost  is  met 
by  general  taxation,  since  the  first  principle  of  general 
taxation  is  that  it  must  be  levied  equally  and  uniformly 
upon  all.  Some  special  system  of  taxation  must  be  de- 
vised, the  operation  of  which  will  distribute  the  cost  in 
the  ratio  of  the  benefits  conferred.  To  do  this  is  the 
object  and  function  of  "special  assessments."  If  A's 
property  is  benefited  twice  as  much  as  B's,  he  may  fairly 
be  required  to  pay  two  dollars  where  B  pays  one.  If  B's 
property  receives  no  special   benefit   from  the  improve- 


158  MUNICIPAL  PUBLIC   WORKS 

ment,  A  may  be  required  to  pay  the  whole  of  the  cost, 
provided  he  is  benefited  to  that  extent.  This  theory  is 
very  simple,  and  obviously  just.  But  when  we  come  to 
determine  how  the  burden  is  to  be  divided  between  A 
and  B,  or  between  the  great  number  of  people  whose 
benefits  must  be  considered,  the  problem  is  far  from 
simple.  Its  proper  solution  is  the  object  of  all  the  vari- 
ous laws  and  court  decisions  on  the  subject. 

The  courts  have  dealt  with  a  great  many  cases  through 
a  long  period  of  years,  and  the  result  has  been  to  arrive 
at  a  code  of  principles  which  may  be  now  considered 
pretty  well  defined  and  settled.  They  may  be  outlined 
as  follows  :  — 

First,  the  right  of  the  government  to  levy  and  enforce 
special  assessments  within  defined  limits  is  thoroughly 
established. 

Second,  special  assessments  partake  of  the  nature  of 
taxes,  but  the  law  makes  a  broad  distinction  between 
ordinary  taxes  and  special  assessments. 

"  Taxes  .  .  .  are  public  burdens  imposed  generally 
upon  the  inhabitants  of  the  whole  state  or  upon  some 
civil  division  thereof  for  governmental  purposes,  with- 
out reference  to  peculiar  benefits  to  particular  individuals 
or  property.  Assessments  have  reference  to  impositions 
for  improvements  which  are  especially  beneficial  to  par- 
ticular individuals  or  property,  and  which  are  imposed  in 
proportion  to  the  particular  benefits  supposed  to  be  con- 
ferred. They  are  justified  only  because  the  improvements 
confer  special  benefits,  and  are  just  only  when  they  are 
divided  in  proportion  to  such  benefits.  "^ 
1  Roosevelt  Hospital  vs.  The  Mayor  of  New  York,  81  N.  Y.  108,  p.  112. 


SPECIAL   ASSESSMENTS  159 

Thus  special  assessments,  while  a  species  of  taxation, 
are  to  be  "  understood  to  mean,  a  special  imposition 
levied  to  defray  the  expenses  of  a  specific  improvement 
upon  those  property  owners  to  whom  particular  advan- 
tages accrue,  and  in  the  ratio  of  those  advantages."  ^  But, 
like  ordinary  taxes,  they  have  their  foundation  in  the 
taxing  power  of  the  government.  They  may  be,  and 
generally  are,  though  not  necessarily,  levied  and  collected 
in  the  same  way  as  other  taxes.  Like  ordinary  taxes 
they  constitute  a  lien  on  the  property  assessed,  taking 
precedence  of  all  other  claims,  ordinary  taxes  alone  ex- 
cepted. Except  that  they  are  not  levied  equally  and 
uniformly  on  all,  they  are  subject  to  the  same  limitations 
as  other  taxes.  They  can  be  levied  for  public  purposes 
only,  and  must  be  applied  to  the  public  welfare.  They 
can  be  levied  only  by  due  process  of  law,  and  must  con- 
form to  all  the  requirements  prescribed  in  levying  other 
taxation . 

Third,  special  assessments  can  be  levied  only  in  ex- 
change for  special  benefits  conferred,  and  only  to  the 
extent  of  such  benefits.  Unless  A  is  especially  benefited 
by  an  improvement,  he  cannot  be  especially  assessed  for 
its  cost,  and  if  his  property  is  benefited  only  to  the  extent 
of,  say,  five  hundred  dollars,  he  cannot  be  specially  as- 
sessed for  more  than  that  sum,  no  matter  what  may  be  the 
actual  cost. 

Fourth,  it  seems  not  to  be  clearly  established  that  the 

cost  of  an  improvement  must  be  divided  among  all  who 

are  benefited  by  the  improvement.     Public  improvements 

are  not  warranted  in  law  unless  they  are  for  the  public 

1 "  Special  Assessments,"  by  Victor  Rosewater,  Columbia  College,  1893. 


160  MUNICIPAL   PUBLIC   WOPtKS 

good,  and  if  so,  every  member  of  the  public  must,  in  the- 
ory at  least,  be  benefited  more  or  less  thereby.  But  the 
courts  have  not  uniformly  held  that  in  such  cases  the  cost 
may  not  all  be  assessed  upon  those  who  are  particularly 
benefited,  provided  that  the  special  benefits  equal  the 
amount  assessed.  The  general  trend  of  the  decisions  is, 
however,  to  the  effect  that  assessments  must  be  appor- 
tioned among  all  who  are  benefited,  and  in  the  ratio  of 
those  benefits. 

Fifth,  special  assessments  can  be  levied  only  by 
authority  of  the  legislature,  and  in  strict  accordance  with 
the  statutes  relating  thereto  ;  but  the  legislature  may  dele- 
gate its  power  to  municipal  corporations,  subject  to  such 
limitations  and  regulations  as  it  may  prescribe.  The 
authority  thus  granted,  however,  cannot  be  exceeded  by 
the  municipality,  and  all  proceedings  must  conform  strictly 
to  the  provisions  of  the  statutes,  any  departure  from  the 
prescribed  procedure  invalidating  the  assessment. 

Sixth,  while  the  fundamental  principles  governing 
special  assessments  are  well  established,  and  compliance 
with  them  is  insisted  upon  by  the  courts,  great  variety 
exists  and  is  allowed  in  the  method  of  their  application, 
and  the  laws  of  the  state  and  the  ordinances  of  the  cor- 
poration must  be  studied  and  followed  in  the  case  of  each 
individual  city. 

Usually,  the  legislative  acts  authorizing  special  assess- 
ments are  very  explicit  and  set  out  in  detail  the  method 
to  l)e  followed,  and  very  little  latitude  for  variation  is 
allowed  the  municipal  corporation,  whose  officers  are 
therefore  only  called  upon  to  comply  as  closely  as  possible 
with  the  line  of  procedure  thus  laid  down. 


SPECIAL  ASSESSMENTS  161 

Legislative  enactments,  however,  while  purporting  to 
be  of  a  general  character,  are  often  drawn  so  that  they 
really  apply  to  but  one  or  two  municipal  corporations  in 
the  state,  and  are  framed  to  meet  the  actual  or  supposed 
conditions  and  needs  of  those  corporations,  and  their  pro- 
visions are  often  suggested  or  dictated  by  the  local 
corporation  authorities.  It  is  therefore  desirable  that 
city  officials  and  citizens  should  be  familiar  with  the  sub- 
ject to  which  such  legislation  relates.  While  it  would  be 
quite  impossible  to  go  into  all  the  details  of  the  applica- 
tion of  special  assessments  to  the  several  kinds  of  munici- 
pal work,  it  will  not  be  amiss  to  look  into  the  matter 
in  a  general  way,  with  the  view  of  establishing  correct 
conceptions  on  the  subject. 

While  special  assessments  must  be  levied  in  the  ratio 
of  benefits  conferred,  there  exists  great  latitude  in  the 
methods  employed  for  accomplishing  the  proper  distribu- 
tion of  the  cost  of  an  improvement  among  those  benefited. 
Schemes  of  assessment  that  prove  satisfactory  for  one  kind 
of  improvement  may  be  entirely  unsuitable  for  another, 
and  the  local  conditions  in  one  city  may  be  so  different 
from  those  in  another  that  the  same  method  may  not  be 
applicable  to  work  of  the  same  general  character  in  each. 

One  of  the  most  common  apialications  of  special  assess- 
ment is  to  provide  means  for  the  construction  of  street 
pavements.  It  is  especially  appropriate  for  this  kind  of 
improvement,  because  in  no  other  is  the  fact  of  special 
benefit  so  obvious  and  so  easily  demonstrated.  The  con- 
struction of  a  good  pavement  in  front  of  city  property 
hardly  ever  fails  greatly  to  enhance  the  value  of  that 
property,  while,  except  in  so  far  as  it  benefits  the  public 


162  MUNICIPAL  PUBLIC  WORKS 

at  large,  it  does  not  materially  increase  tlie  value  of  prop- 
erty not  contiguous  to  the  street  paved.  The  increase  in 
the  value  of  the  abutting  property  is  usually  so  great  and 
so  immediate  that  the  cost  of  the  work  is  willingly  met 
by  the  owners  of  the  property  thus  benefited.  ]\Ioreover, 
the  demand  for  good  pavements  in  every  city  is  so  insist- 
ent, and  the  cost  so  great  in  the  aggregate,  that  the  com- 
munity is  not  willing  to  wait  until  they  can  be  provided 
and  paid  for  out  of  the  ordinary  revenues  of  the  corpora- 
tion. Special  assessments,  particularly  where  they  are 
paid  in  instalments  extending  over  a  period  of  years, 
offer  a  ready  and  acceptable  solution  of  the  problem,  with- 
out greatly  increasing  the  burden  of  general  taxation. 

While  the  lawful  application  of  special  assessments  to 
the  meeting  of  the  cost  of  street-paving  is  more  simple 
than  to  any  other  class  of  work,  it  is  not  without  its  diffi- 
culties and  perplexities,  particularly  in  view  of  the  more 
recent  decisions  of  the  courts,  enforcing  very  literally  the 
condition  that  assessments  must  be  strictly  in  accordance 
with  benefits. 

The  first  question  that  arises  in  considering  a  scheme 
of  special  assessments  for  street-paving  is  that  relating 
to  the  relative  parts  of  the  cost  that  should  be  paid  by 
the  public  at  large  and  by  the  owners  of  property  abut- 
ting on  the  street.  Tlie  more  common  practice  is  to 
consider  that  the  abutting  property  is  alone  specially 
benefited,  and  must  therefore  bear  the  whole  cost  of 
the  improvement.  This  assumption  is  particularly  at- 
tractive because  it  relieves  tlie  municipality  from  paying 
any  part  of  the  cost  of  the  improvement,  and  greatly  sim- 
plifies the  levying  and  collecting  of  the  assessments.     But 


SPECIAL  ASSESSMENTS  163 

the  assumption  that  the  abutting  property  is  alone  spe- 
cially benefited  by  the  paving  of  a  street  is  nearly  always 
wrong  in  both  theory  and  practice.  The  public  must 
necessarily  be  more  or  less  benefited  by  the  improvement 
in  nearly  every  case.  This  fact  is  recognized  in  a  large 
number  of  cities,  and  some  provision  is  made  for  paying 
a  part  of  the  cost  from  the  general  funds.  A  quite  com- 
mon practice  is  for  the  municipality  to  pay  the  cost  of 
paving  the  street  intersections,  the  balance  being  dis- 
tributed among  the  abutting  property  owners.  In  other 
cities  some  definite  part,  varying  from  one-fiftieth  to  one- 
half  of  the  whole  cost,  is  paid  by  the  municipality.  In 
others  the  cost  of  the  intersections  and  some  aliquot  part 
of  the  whole  of  the  remaining  cost  is  met  by  the  munici- 
pality. In  still  others  the  municipality  pays  for  the  grad- 
ing of  the  street,  and  assesses  the  cost  of  the  pavement 
proper  upon  the  abutting  property.  These  methods  are 
simple,  but  a  little  consideration  will  show  that  when  ap- 
plied uniforml}'  to  all  streets  they  are  wrong  in  theory  and 
generally  wrong  in  practice,  for  the  reason  that  the  relative 
benefits  accruing  to  the  general  public  and  to  the  abutting 
property  owners  are  scarcely  ever  the  same  on  different 
streets,  or  on  different  parts  of  the  same  street.  In  the 
case  of  central  business  streets,  largely  used  by  the  public, 
the  general  benefit  to  the  public  may  be  much  greater 
than  the  special  benefit  to  the  owners  of  the  abutting 
property  ;  while  in  the  case  of  suburban  or  residence 
streets,  not  much  used  as  public  highways,  the  benefit 
may  be  almost  wholly  to  the  property  owners  along 
the  street.  Between  these  two  extremes  there  must 
exist  different  ratios   of    benefit   to   the   public   and    to 


164  MUNICIPAL  PUBLIC  WORKS 

the  property  owners  on  each  different  street.  It 
would  seem,  therefore,  that  if  the  underlying  princi- 
ple of  special  assessments  is  to  be  strictly  adhered  to, 
there  can  be  no  hard  and  fast  rule  adopted  and  applied 
to  all  streets  alike.  When  it  comes  to  distributing  among 
them  the  part  to  be  paid  by  the  abutting  property  owners 
on  any  one  street,  the  almost  universal  practice  is  to  divide 
the  whole  amount  assessed  in  the  ratio  that  the  number  of 
abutting  front  feet  of  each  property  owner  bears  to  the 
whole  number  of  front  feet  of  property  abutting  on  the 
street.  This  is  known  as  "the  front  foot"  method.  It 
is  the  simplest  possible  method,  but  its  simplicity  is 
about  the  only  argument  in  its  favor.  It  may,  and  per- 
haps generally  does,  occur  that  each  property  owner  on  the 
street  is  benefited  by  the  improvement  in  the  ratio  of  his 
property  fronting  on  the  street ;  but  the  exceptions  are  so 
many  and  the  injustice  of  the  rule  is  often  so  palpable  as 
to  make  it  a  very  dangerous  procedure  in  view  of  the 
enforcement  by  the  courts  of  the  principle  that  assess- 
ments must  be  in  the  ratio  of  special  benefits  conferred. 
Every  city  official  who  has  had  experience  in  levying 
special  assessments  by  this  method  will  recall  one  or  more 
cases  where  its  operation  brought  about  injustice  to  some 
of  the  property  assessed,  and  therefore  violated  the  spirit, 
if  not  the  letter,  of  the  law.  Some  common  examples  may 
not  be  uninteresting.  The  plat  on  the  next  page  is  an 
imaginary  one,  but  all  the  anomalous  features  it  contains, 
and  many  others,  are  actually  met  with  in  city  maps.  It 
is  proposed  to  pave  streets  A  and  B,  and  to  assess  the  cost 
of  the  work  upon  the  abutting  property  by  the  front-foot 
method.     A  glance  at  the  phit  will  show  the  difficulties 


SPECIAL  ASSESSMENTS 


165 


that  will  be  encountered.  "We  need  not  consider  the 
question  of  how  to  assess  the  corner  lots,  as  it  has  been 
quite  fully  discussed. 

To   assess  lots  9,  10,  and  11  equally  would  be  at  least 
open  to  criticism,  since  their  value  for  business  purposes, 


A    STREET 


55 


56 


57 


and  the  benefit  to  each,  cannot  be  equal.  Lots  17  and 
35  have  the  same  frontage,  but  the  former  is  200  feet 
deep,  while  the  latter  is  but  150  feet  deep.  Their 
value    for    business     purposes    is    presumably    in     the 


166  MUNICIPAL  PUBLIC   WORKS 

ratio  of  their  area,  and,  if  so,  one  must  be  benefited 
more  than  the  other.  Lots  33,  34,  and  35  are  so  different 
from  each  other  that  the  benefit  they  would  receive  can- 
not be  measured  by  the  extent  of  tlieir  frontage  on  the 
street.  Lots  24  and  25  present  the  same  anomalous  con- 
ditions. Lot  4  and  lot  28  are  of  the  same  actual  width, 
but  their  frontage  is  different  because  lot  4  does  not  lie 
perpendicular  to  the  street.  Lots  3,  4,  5,  6,  and  7  obvi- 
ously cannot  be  assessed  for  the  same  sum,  even  if 
street  A  were  alone  paved ;  but  since  street  B  is  to  be 
paved  also,  each  lot  must,  by  the  front-foot  method,  be 
doubly  assessed.  Furthermore,  in  this  case  the  benefit  is 
not  confined  to  the  lots  abutting  on  the  streets,  since  lots 
55  and  56  will  obviously  be  benefited  by  the  pavement  of 
street  A.  Where  the  streets  are  curved,  as  in  some 
cities,  still  further  irregularities  will  exist. 

If,  as  is  often  the  case,  the  grade  of  the  street  is 
changed,  it  will  introduce  other  discrepancies  in  the  bene- 
fits conferred  by  the  improvement,  and  even  if  the  grades 
are  not  changed  at  the  time,  it  may  be  questioned  whether 
the  relation  between  the  surface  of  the  lots  and  the  sur- 
face of  the  street  should  not  be  considered.  It  can  hardly 
be  said  that  the  owner  of  a  lot  that  must  be  filled  up  ten 
feet  before  it  can  be  built  upon,  is  as  much  benefited  by 
the  paving  of  the  street  as  is  the  owner  of  a  lot  that  re- 
quires no  such  grading. 

It  will  at  once  occur  to  the  reader  that  the  area  of  these 
several  lots  is  an  important  element  in  determining  the 
fair  share  tliey  should  bear  of  the  cost  of  the  improve- 
ment. It  has  been  proposed  to  make  area,  as  well  as 
frontage,  an  element  in  levying   special   assessments,  by 


SPECIAL  ASSESSMENTS  167 

assuming  that  a  certain  percentage  of  the  whole  cost  to 
be  assessed  shall  be  levied  by  the  front-foot  method,  and 
the  remainder  shall  be  distributed  in  the  ratio  of  the  areas 
of  the  several  lots.  This  plan  is  used  in  a  few  cities  in 
apportioning  assessments  for  sewers ;  but  so  far  as  the 
writer  knows,  it  has  not  been  applied  in  the  case  of  pave- 
ments. 

In  one  city,  Seattle,  Washington,  the  property  fronting 
on  the  street  is  divided  into  belts  or  zones,  parallel  to  the 
street,  and  the  cost  is  assessed  on  the  property  in  a  stated 
ratio  to  its  area  lying  within  those  zones.  Forty  per  cent 
is  assessed  against  property  lying  within  the  first  zone, 
thirty  feet  wide,  adjoining  the  street,  twenty-five  per  cent 
on  property  in  the  zone  between  thirty  and  sixty  feet  from 
the  street,  twenty  per  cent  on  the  zone  bounded  by  lines 
sixty  and  ninety  feet  from  the  street,  and  fifteen  per  cent 
on  the  property  lying  in  the  rear  of  the  line  ninety  feet 
from  the  street,  this  zone  extending  to  the  central  line 
between  two  parallel  streets,  and  varying  in  width  accord- 
ing to  the  depth  of  the  blocks.  This  plan  has  much  in 
its  favor,  eliminating  as  it  does  some  of  the  difficulties  of 
the  front-foot  system  ;  but  it  does  not  w^hoUy  remedy  the 
glaring  defects  of  that  plan. 

When  it  comes  to  specially  assessing  the  cost  of  sewer 
improvements,  the  conditions  differ  from  those  of  street- 
paving,  and  a  different  system  is  generally  necessary, 
though  in  a  number  of  cities  the  cost  is  distributed  on 
the  front-foot  plan  with  certain  modifications.  In  con- 
structing a  sewer  system  the  cost  is  not  uniformly  distrib- 
uted along  the  streets  in  the  area  drained.  Beginning  at 
the  outer  margin  of  a  sewerage  district,  the  size  and  cost 


168  MUNICIPAL  PUBLIC  WORKS 

of  the  sewers  must  necessarily  increase  to  the  final  out- 
let, and  it  would  be  obviously  unfair  to  assess  each 
street  with  the  cost  of  sewers  lying  in  front  of  and 
serving  the  property  on  that  street.  The  sewerage  pro- 
vided serves  the  wants  of  all  property  in  the  district 
equally,  and  the  object  should  be  to  distribute  the 
cost  on  some  equitable  plan  over  the  property  of  the 
whole  district.  Among  the  methods  in  most  common 
use,  that  of  assessing  each  lot  in  the  ratio  that  the 
area  of  that  lot  bears  to  the  area  of  the  whole  sewer- 
age district,  seems  most  equitable.  Assuming  that  the 
whole  district  is  built  up,  this  plan  is  reasonable,  since 
it  may  be  roughly  assumed  that  the  quantity  of  sewage 
to  be  cared  for  from  each  lot  is  in  the  ratio  of  the  area 
of  the  lot.  This  is  more  nearly  true  where  the  sewers 
are  designed  to  take  care  of  the  storm  water  as  well 
as  the  sewage  proper.  The  owners  of  unimproved 
property  very  naturally  object  to  being  required  to 
pay  for  sewers  which  they  do  not  at  present  need ;  but 
a  proper  reply  to  them  is  that  a  sewerage  system  is  a 
permanent  improvement,  the  utility  of  which  will  extend 
over  a  long  period  of  time,  and  which  cannot  usually 
be  built  in  parts  as  it  may  be  needed;  and  that  the 
construction  of  sewers  in  unimproved  property  makes 
such  property  more  available  for  improvement,  and  thus 
enhances  its  value.  A  number  of  cities  have  adopted 
the  method  of  assessing  a  stated  percentage  of  the  cost 
by  the  front-foot  plan,  and  the  balance  upon  the  area 
plan ;  and  various  other  schemes  are  in  use. 

In  the  construction  of  sewers  the  relative  benefit  to  the 
public  at  large  as  compared  with  the  individual  property 


SPECIAL  ASSESSMENTS  169 

owner  is  greater  than  in  the  paving  of  streets.  The 
existence  or  absence  of  sewers  may  very  materially  affect 
the  sanitary  conditions  of  the  whole  city,  and  this  is  true 
whether  the  sewers  are  for  the  service  of  the  whole  city  or 
for  only  a  part  of  it,  as  a  single  sewerage  district.  It  is 
quite  proper,  therefore,  that  a  part  of  their  cost  should  be 
met  from  the  public  funds,  and  this  is  usually  provided 
for  in  some  way ;  but  no  satisfactory  basis  for  determining 
how  much  of  the  cost  shall  be  borne  by  the  public,  and 
how  much  shall  be  assessed  upon  the  individuals  or  the 
district  specially  benefited,  has  been  devised.  In  some 
cities  a  certain  aliquot  part  of  the  whole  cost  is  paid 
from  the  general  fund ;  in  others,  the  larger  or  trunk 
sewers  are  paid  for  by  the  city,  and  the  cost  of  the 
smaller  ones  is  assessed  upon  property  holders ;  but  the 
conditions  vary  so  greatly  in  the  different  cities,  and  in 
the  different  parts  of  the  same  city,  that  no  inflexible 
rule  can  be  justly  applied  to  all.  Some  few  cities  have 
adopted  the  plan  of  constructing  sewers  at  the  expense 
of  the  general  fund,  and  charging  individual  property 
owners  a  stipulated  rental  for  each  connection,  and  much 
may  be  said  in  favor  of  this  practice  where  the  rentals  are 
properly  adjusted.  In  the  great  majority  of  the  cities, 
the  house  connections  are  put  in  at  the  expense  of  the 
individual  owners. 

Special  assessments  are  also  resorted  to  in  a  number 
of  cities  to  provide  a  part  of  the  cost  of  constructing 
water  works,  but  the  conditions  are  more  complicated 
than  in  the  case  of  either  pavements  or  sewers,  although 
where  special  benefits  clearly  accrue  to  one  or  more 
property  owners  from  water-works   improvements,  it  is 


170  MUNICIPAL   PUBLIC   WORKS 

entirely  just  that  they  should   be  specially  assessed   for 
a  part  of  the  cost. 

What  has  been  said  is  sufficient  to  show  that,  granting 
the  legality  and  justness  of  special  assessments,  the  great 
difficulty  that  constantly  presents  itself  in  their  practical 
application,  is  so  to  apportion  the  amount  levied  on  each 
individual  in  the  ratio  of  the  benefits  received  by  him  as 
to  meet  the  very  strict  requirements  of  the  general  law 
as  it  is  now  interpreted  by  the  highest  courts.  While 
cases  of  slight  injustice  to  individuals  may  be  overlooked 
by  the  courts,  where  the  effort  properly  to  apportion  the 
levy  in  accordance  with  the  law  is  apparent,  any  consider- 
able departure  from  the  principles  laid  down  will  render 
the  whole  levy  illegal  and  void.  It  becomes,  therefore,  a 
matter  of  the  very  greatest  importance  to  municipal  cor- 
porations, not  only  that  any  system  of  special  assessments 
adopted  shall  be  workable  in  accordance  with  the  legal 
requirements,  but  that  great  care  shall  be  taken  to  follow 
implicitly  the  line  of  procedure  which  the  law  prescribes. 

In  framing  special  assessment  laws  it  would  seem  very 
unwise  to  lay  down  inflexible  rules  or  details  which  may 
not  be  applicable  to  varying  conditions  as  they  may  arise, 
and  which  do  not  permit  such  elasticity  as  will  allow  these 
unusual  and  varying  conditions  to  be  met  and  provided 
for  in  a  just  and  rational  manner.  It  would  seem  that 
the  only  way  in  which  this  can  be  done  is  to  delegate 
to  some  competent  and  disinterested  person  or  persons 
the  power  and  authority  to  make  the  distribution  of  cost 
among  all  the  parties  benefited,  after  a  full  consideration 
of  all  the  facts.  In  this  way  the  intent  of  the  law  could 
be  carried  out  with   judgment  and  intelligence.       The 


SPECIAL  ASSESSMENTS  171 

law  of  the  state  of  New  York  relating  to  special  assess- 
ments in  the  city  of  New  York  is  framed  upon  this  idea, 
and  as  its  provisions  seem  to  come  nearer  to  the  ideal 
plan  of  dealing  with  the  subject,  its  leading  provisions 
will  be  here  outlined.  The  new  charter  for  "  Greater 
New  York,"  adopted  in  1897,  made  some  changes  in  the 
provisions  that  were  in  force  previous  to  that  time,  but 
they  are  not  very  material. 

Under  the  new  charter  special  assessments  belong  to 
the  "Department  of  Taxes  and  Assessments."  Under  this 
general  department  there  is  appointed  by  the  mayor  a  per- 
manent "  Board  of  Assessors,"  consisting  of  five  persons. 
This  board  is  authorized  to  appoint  a  secretary  and  such 
subordinates  as  may  be  necessary.  "  The  said  board  shall 
be  charged  with  the  duty  of  making  all  assessments,  other 
than  those  required  by  law  to  be  confirmed  by  a  Court  of 
Record  for  local  improvements,  for  which  assessments  may 
be  legally  imposed  in  any  part  of  the  city  of  New  York  as 
hereby  constituted."^ 

There  is  also  created  the  "  Board  of  Revision  of  Assess- 
ments," composed  of  the  Comptroller,  the  Corporation 
Counsel,  and  the  president  of  the  Board  of  Public  Im- 
provements, which  board  has  power  to  revise,  correct,  and 
confirm  all  assessments  not  confirmed  by  the  Board  of 
Assessors.  "  Said  board  shall  have  power  to  consider,  on 
the  merits,  all  objections  made  to  any  such  assessment,  and 
to  subpoena  and  examine  witnesses  in  relation  thereto,  and 
to  confirm  said  assessment,  or  to  refer  the  same  back  to  the 
Board  of  Assessors  for  revisal  and  correction  in  such 
respects  as  it  may  determine." 

1  Sec.  943,  Chap.  378,  Acts  1897, 


172  MUNICIPAL  PUBLIC   WORKS 

Local  improvements  are  initiated  and  carried  out  as 
provided  for  in  the  charter,  and  the  authority  which 
determines  that  such  improvement  shall  be  made  has 
power  to  determine  whether  any,  and  if  any,  what  pro- 
portion of  the  cost  or  expense  of  the  improvement  shall 
be  borne  and  paid  by  the  city,  and  the  remainder  of  the 
cost  and  expense  thereof  shall  be  assessed  upon  the  prop- 
erty deemed  to  be  benefited  thereby.  The  work  of  such 
improvements  is  carried  out  by  contract  and  paid  for  from 
the  city  funds  pending  the  collection  of  the  special  assess- 
ments. 

When  any  public  work  which  is  to  be  paid  for  wholly 
or  partly  by  special  assessments  has  been  completed,  the 
officer,  or  head  of  department  charged  with  the  execution 
of  the  work,  certifies  to  the  Board  of  Assessors  the  total 
amount  of  all  the  exj)enses  which  shall  have  been  actually 
incurred  by  the  city  on  account  thereof.  The  City  Comp- 
troller also  certifies  to  the  Board  of  Assessors  the  amount 
of  interest,  at  the  legal  rate,  upon  all  the  money  that  may 
have  been  paid  out  for  the  work,  from  the  time  of  payment 
to  a  date  sixty  days  after  the  date  of  such  certificate.  The 
Board  of  Assessors  then  proceeds  to  assess  upon  tlie  prop- 
erty benefited,  in  the  manner  autliorized  by  law,  the  aggre- 
gate amount  of  such  certificates,  or  such  proportion  thereof 
as  is  authorized  by  law ;  but  the  amount  assessed  against 
any  property  may  not  exceed  onc-lialf  the  fair  value  thereof. 

The  lioard  of  Assessors,  when  it  has  completed  the 
assessment,  must  publisli  a  notice  of  the  fact.  This 
notice  must  describe  the  limits  within  which  it  is  pro- 
posed to  lay  the  proposed  assessment,  and  must  request 
all  persons  who  may  be  affected  thereby,  and  who  may  be 


SPECIAL   ASSESSMENTS  173 

opposed  to  the  same,  to  present  their  objections  in  writing 
to  the  secretary  of  the  board  within  thirty  days  of  the 
date  of  the  notice,  and  it  must  specify  a  time  and  place 
when  and  where,  after  the  expiration  of  thirty  days,  such 
objections  will  be  heard,  and  testimony  received.  If  no 
objections  shall  be  received,  or  if  the  assessment  shall  be 
altered  so  as  to  remove  the  objections,  the  board  at  once 
declares  the  assessment  confirmed,  and  transmits  the  same 
to  the  Comptroller  for  entry  and  collection.  If,  however, 
the  board  shall  not  alter  an  assessment  to  which  objections 
have  been  made,  or  if  objections  still  exist  after  it  is 
altered,  it  is  their  duty  to  present  the  proposed  assess- 
ment, with  the  objections  thereto,  to  the  Board  of  Revision 
of  Assessments,  who,  after  hearing  evidence  and  consider- 
ing the  matter,  may  either  confirm  the  assessment  or  refer 
it  back  to  the  Board  of  Assessors  for  revisal  and  correction 
in  such  respects  as  it  may  determine.  If  confirmed,  it  is 
sent  to  the  Comptroller,  but  if  not  confirmed,  or  if  not 
referred  back  for  revision  within  thirty  days  after  presen- 
tation, it  shall  be  deemed  confirmed. 

Damages  for  changes  of  grade  may  be  allowed  by  the 
Board  of  Assessors,  under  certain  conditions,  and  any 
damage  allowed  shall  be  included  in  the  cost  of  the 
improvement  and  the  assessment  therefor. 

After  the  confirmation  of  the  assessment  any  property 
owner  who  may  allege  that  fraud  or  substantial  error  has 
been  committed  in  the  assessment,  may  bring  his  case 
before  a  justice  of  the  Supreme  Court,  who,  after  hearing, 
may  modify  the  assessment ;  but  it  is  specifically  provided 
that  no  technicality  or  informality  or  irregularity  in  the 
proceedings   leading   to   the   assessment   shall   invalidate 


174  MUNICIPAL  PUBLIC  WORKS 

such  assessment.  It  is  distinctly  declared  that  "All 
property  in  said  city  benefited  by  any  improvement  or 
other  public  work  .  .  .  shall  be  liable  to  assessment  for 
such  improvement  or  work."  No  assessment  can  be 
vacated  by  the  court,  but  it  may  be  reduced  to  the  extent 
that  it  may  be  shown  to  have  been  increased  by  fraud  or 
substantial  error,  and  in  no  event  shall  the  property  be 
relieved  from  assessment  of  its  fair  proportion  of  the 
fair  cost  of  any  local  improvement.  The  amount  so 
specially  assessed  against  any  property  becomes  a  lien  on 
the  property,  and  is  collected  in  the  same  manner  as  are 
ordinary  taxes.  The  property  of  the  city,  as  well  as  pri- 
vate property,  is  subject  to  special  assessments. 

The  provisions  of  this  law  which  are  most  worthy  of 
note  are,  first,  that  it  provides  a  special  board  or  body  of 
men  who  are  authorized  to  deal  with  the  whole  subject 
of  apportioning  special  assessments  ;  second,  that  beyond 
restrictions  which  are  general  in  their  character,  this 
board  has  full  and  unrestricted  authority  to  exercise  its 
judgment  in  apportioning  the  cost  of  any  improvement 
among  those  benefited  in  the  ratio  of  such  benefits  ;  and, 
third,  that  ample  provision  is  made  for  hearing,  consider- 
ing, and  deciding  the  objections  of  any  property  owner 
who  may  feel  himself  aggrieved  by  the  assessment  made. 
It  seems,  therefore,  to  fill  all  the  conditions  requisite 
in  such  a  law,  and  at  the  same  time  it  admits  of  such 
elasticity  and  flexibility  in  details  as  to  avoid  the  diffi- 
culties that  are  met  with  in  the  practical  application  of 
the  more  rigid  laws  found  in  many  states.  While  its 
details  may  be  varied,  the  principles  which  it  represents 
are  applicable  to  all  localities. 


CHAPTER   XIII 
MUNICIPAL  ACCOUNTS  AND  UNIFORM  ACCOUNTING 

Brief  reference  was  made  in  Chapter  X  to  the  impor- 
tance of  uniform  municipal  accounting  in  order  that  the 
results  of  the  construction  and  operation  of  municipal 
works  in  one  city  may  be  intelligently  compared  with 
those  in  other  cities.  The  whole  matter  of  municipal 
accounting  is  so  intimately  connected  with  the  proper 
administration  of  the  public  works  of  a  city  that  the 
subject  may  be  appropriate  for  consideration  in  this  book. 
It  is  not  too  much  to  say  that  few  subjects  now  occupying 
the  attention  of  municipal  officers  and  students  of  munici- 
pal government  are  of  more  practical  importance  than  that 
of  municipal  bookkeeping  and  accounts.  It  is  a  subject 
that  until  recent  years  has  received  comparatively  little 
attention. 

It  is  asserted  by  those  who  have  looked  into  the  subject 
that,  with  very  few  exceptions,  the  accounting  systems 
and  practices  of  our  cities  and  towns  are  imperfect,  inade- 
quate, and  antiquated  to  a  degree  that  would  not  be 
tolerated  for  a  moment  in  a  modern  private  business 
corporation  or  firm.  It  is  often,  if  not  generally,  difficult 
to  obtain  from  the  published  reports  and  statements,  or 
from  the  books,  reliable  information  as  to  the  actual 
finances  of  the  city,  and  much  more  difficult  to  determine 
with   accuracy   and  in  satisfactory  detail  the  cost  of  its 

175 


176  MUNICIPAL   PUBLIC   WORKS 

various  public  works  and  services.  In  many  cases  this  is 
doubtless  due  to  the  fact  that  the  systems  and  forms  used 
were  adopted  when  the  cities  were  much  smaller,  and  be- 
fore the  growth  and  complexity  of  the  corporation  busi- 
ness rendered  more  accurate  methods  necessary,  and  they 
have  not  been  since  changed  to  meet  the  new  conditions. 

There  will  be  found  a  wide  difference  between  the 
accounting  of  cities,  and  that  of  a  model  business  corpora- 
tion, where  not  only  the  financial  condition  of  the  corpora- 
tion is  distinctly  and  accurately  disclosed,  but  the  cost 
of  every  part  of  its  business  or  work  is  accurately  deter- 
mined down  to  minute  details,  and  in  such  form  as  to 
be  readily  accessible  at  any  time  to  the  management. 
The  science  of  account  keeping  has  made  great  advance- 
ment in  the  hands  of  these  business  corporations,  and 
their  methods  might  be  studied  to  great  advantage  by 
municipal  accountants.  It  would  probably  be  found  that, 
notwithstanding  their  completeness  and  accuracy,  they 
are  much  less  cumbersome  than  old-fashioned  methods, 
and  that  they  are  also  less  expensive.  But  whether  more 
or  less  expensive,  the  importance  of  complete  and  accurate 
accounts  justifies  the  expenditure  of  any  reasonable 
amount  of  money  necessary  to  secure  them.  No  fact  is 
better  recognized  in  the  modern  business  world  than  that 
such  accounts  are  a  necessity,  whatever  they  may  cost. 

If  the  manufacturer  is  told  by  liis  bookkeeper  that 
the  total  cost  of  making  a  given  article  is  a  stated  sum, 
he  will  add  his  percentage  of  profit  and  fix  the  selling 
price  accordingly.  If  the  accounts  upon  whicli  he  relies 
are  erroneous  or  misleading,  and  the  cost  of  manufactur- 
ing is  greater  tlian  was  represented,  he  may  find  himself 


UNIFORM   MUNICIPAL  ACCOUNTING  177 

on  the  road  to  bankruptcy  rather  than  to  prosperity. 
He  therefore  cannot  afford  to  have  any  mistake  or  uncer- 
tainty in  his  accounting  department.  This  should  be  no 
less  true  with  municipal  corporations.  And  yet,  if  credi- 
ble witnesses  are  to  be  believed,  it  would  be  a  very  diffi- 
cult thing  to  obtain  the  true  cost  of  public  work  and 
public  service  from  the  books  or  reports  of  most  cities. 
Thus,  it  has  been  conclusively  proved  by  expert  examina- 
tion that  reports  of  the  cost  of  electric  lighting,  where  the 
lighting  plant  is  owned  by  the  city,  have  been  grossly 
erroneous,  and  both  citizens  and  city  officials  have  been 
led  into  the  belief  that  the  service  has  been  phenomenally 
economical,  when  as  a  matter  of  fact  it  has  been  exces- 
sively expensive.  It  is  hardly  supposable  that  these  mis- 
leading accounts  are  purposely  distorted  in  order  to  deceive, 
and  they  can  only  be  explained  upon  the  hypothesis  that 
the  bookkeeping  is  defective  and  wholly  unreliable. 

An  account  that  gives  but  part  of  the  information  it 
is  intended  to  and  should  convey,  may  be,  and  usually  is, 
worse  than  useless.  In  accounts  and  statistics,  more  than 
in  some  other  departments  of  knowledge,  "  a  little  knowl- 
edge is  a  dangerous  thing  "  upon  which  to  base  conclu- 
sions. Thus  a  taxpayer  of  Minneapolis,  knowing  the 
bare  fact  that  the  city  tax  rate  in  that  city  is  $14. 90  per 
thousand  dollars  of  assessed  valuation,  may  justly  feel 
indignant  with  his  home  government  when  he  learns  that 
in  Providence,  Rhode  Island,  a  city  of  about  the  same 
size,  the  city  tax  rate  is  but  $9.70  per  one  thousand  dol- 
lars of  assessed  valuation  ;  but  when  he  learns  that  his 
own  property  is  assessed  upon  but  sixty  per  cent  of  its 
actual  value,  while  that  of  the  Providence  taxpayer  is 


178  MUNICIPAL   PUBLIC  WORKS 

assessed  at  its  full  value,  he  may  readily  figure  that  he  is 
actually  paying  less  city  tax  for  each  one  thousand  dol- 
lars' worth  of  property  than  is  the  citizen  of  Providence, 
and  his  indignation  is  likely  to  disappear. 

An  account  that  deludes  the  officials  or  the  citizens 
of  a  city  into  the  belief  that  under  municipal  ownership 
or  control  the  public  water  supply  or  the  public  light- 
ing is  costing  the  municipal  corporation  very  much  less 
than  the  same  service  could  be  secured  by  contract 
from  private  corporations,  is  not  only  useless  but  posi- 
tively injurious  and  against  public  policy.  It  may  almost 
be  called  criminal.  And  yet,  if  we  are  to  believe  com- 
petent and  often  undisputed  testimony,  such  deceptive 
accounts  are  the  rule  rather  than  the  exception.  A 
few  examples  will  serve  to  illustrate  :  Some  years  ago 
the  city  of  Detroit,  believing  that  it  would  be  more 
economical  to  supply  its  own  public  lighting,  constructed 
and  operated  its  own  electric  lighting  plant.  The  pub- 
lished reports  and  statements  seemed  to  justify  the  expec- 
tations of  economy,  as  they  showed  that  the  actual  cost 
to  the  city  for  each  light  furnished  was  very  much  less 
than  the  lowest  bid  previously  received  from  private 
lighting  companies.  The  results  attracted  wide  atten- 
tion, and  challenged  investigation  by  those  interested 
in  municipal  lighting,  and  such  investigation  disclosed 
the  true  condition  of  affairs,  which  was,  that  as  a  matter 
of  fact  it  was  costing  to  light  the  city  more,  rather  than 
less,  than  it  would  have  cost  had  the  proposition  of  the 
lowest  bidder  been  accepted. ^     In  1898  the  committee  on 

1  See  report  of  Samuel  Unsell  on  cost  of  electric  lighting  in  Detroit, 
published  in  The  Economist^  Chicago,  April  8,  15,  and  22,  1899. 


UNIFORM   MUNICIPAL  ACCOUNTING  179 

lighting  the  streets  of  Springfield,  Massachusetts,  submit- 
ted a  report  from  which  I  quote  the  following  :  — 

"  The  committee  on  lighting  streets,  who  were  directed 
to  investigate  and  report  on  municipal  lighting,  respect- 
fully submit  the  accompanying  report,  after  a  most  care- 
ful and  thorough  investigation.  To  aid  us  in  our 
investigation  your  committee  sent  out  a  list  of  questions 
to  cities  employing  the  municipal  plan,  and  to  cities 
buying  their  lights  from  private  corporations.  Out  of 
fifty  circulars  sent  to  cities  contracting  from  private 
corporations,  we  received  thirty -four  replies,  which  were 
tabulated  as  shown  by  attached  table.  Out  of  the  same 
number  of  circulars  sent  to  cities  using  a  municipal  plant, 
only  eleven  replies  were  received,  and  the  answers  were 
so  indefinite  that  a  more  concise  list  of  questions  were 
sent  out,  and  to  a  second  circular  we  received  seventeen 
replies.  These  were  tabulated  in  the  same  manner  as 
those  from  cities  with  private  plants,  and  the  copy  is 
attached.  We  found  the  answers  received  from  munici- 
pal plants  very  unsatisfactory,  and  we  must  say,  in  some 
cases,  inaccurate,  as  the  answers  received  from  one  city 
were  very  different  on  the  two  circulars  sent,  and  we 
are  advised  that  on  four  requests  for  information  similar 
to  our  own  no  two  were  alike.  This  arises  principally 
from  the  way  in  which  cost  is  figured,  but  the  result  is 
very  unsatisfactory  and  misleading." 

No  better  evidence  than  this  report  affords  could  be 
adduced  to  prove  the  utter  worthlessness  and  deceptive- 
ness  of  systems  and  methods  of  bookkeeping  that  make 
possible  such  misleading  statements  in  important  enter- 
prises. 


180  MUNICIPAL   PUBLIC   WORKS 

Now,  it  iiitay  be  said,  without  any  reference  to  the  ques- 
tion whether  or  not  municipal  ownership  and  operation  is 
desirable,  that  the  taxpayers  of  a  city  are  entitled  to  know 
the  exact  facts,  in  order  that  they  may  judge  of  the  results 
obtained  and  take  such  action  as  those  results  may  seem  to 
demand.  This  knowledge  can  only  be  secured  and  made 
public  through  the  adoption  and  use  of  such  a  system  of 
account  keeping  as  is  to  be  found  in  the  office  of  every 
enterprising  business  man  or  business  corporation. 

While  it  is  hardly  conceivable  that  the  accounts  of  a 
municipality  would  be  intentionally  distorted  for  fraudu- 
lent purposes  by  dishonest  city  officials,  since  the  act  is  too 
easily  detected  by  expert  examination  which  may  be  called 
for  at  any  moment,  it  is  nevertheless  true  that  careless  and 
imperfect  accounts,  which  do  not  reveal  the  whole  truth, 
may  not  only  be  used  to  create  wrong  impressions  of  a 
city's  financial  condition,  but  they  may  be  so  manipulated, 
by  designing  persons,  without  laying  themselves  open  to 
the  charge  of  actual  fraud,  as  to  conceal  from  the  ordinary 
citizen  conditions  which  would,  if  made  public,  at  once 
convict  the  city  government  of  gross  mismanagement,  if 
nothing  worse.  In  this  view  of  the  matter  it  will  be 
apparent  that  there  is  a  close  relation  between  good  mu- 
nicipal accounting  and  good  municipal  government;  for 
in  order  that  city  officials  may  be  held  strictly  responsi- 
ble for  their  trust,  it  is  essential  that  the  public  shall  know 
accurately  and  fully  how  they  are  discharging  that  trust, 
and  this  will  be  impossible  if  the  accounts  kept  and  the  re- 
ports rendered  do  not  show  the  exact  condition  of  the 
city's  finances  and  the  actual  cost  of  administration  in  the 
several  departments  of  business  which  the  city  undertakes. 


UNIFORM  MUNICIPAL  ACCOUNTING  181 

The  ideal  system  of  accounts  for  a  municipal  corporation 
is  one  that  records  and  exhibits  the  actual  condition  of  the 
finances  of  the  corporation  with  such  completeness  and  in 
such  detail  that  not  only  may  each  cent  of  revenue  be 
traced  from  its  source  to  its  ultimate  expenditure,  and 
the  results  achieved  with  it  disclosed,  but  also  the  total 
and  unit  cost  of  the  work  or  service  upon  which  it  may  be 
expended. 

The  salary  paid  to  the  average  accounting  officer  of  our 
cities  will  seldom  secure  the  knowledge,  skill,  and  experi- 
ence necessary  to  devise,  open,  and  maintain  an  ideal  sys- 
tem of  accounts,  and  it  will  often  be  necessary  to  secure 
the  temporary  aid  of  expert  accountants  familiar  with 
municipal  business.  It  is  nearly  always  desirable  to  have 
their  assistance  in  opening  a  set  of  books,  and  the  money 
paid  for  their  services  will  usually  be  well  invested. 

There  seems  to  be  a  growing  tendency  at  this  time  to 
concentrate  the  departments  of  finance  and  accounts  in 
the  hands  of  one  person  of  high  character  and  ability, 
usually  called  the  comptroller,  and  to  clothe  him  with 
rather  extraordinary  power,  which  is  little  short  of  auto- 
cratic. He  may  review  the  actions  of  other  city  officials, 
and  may  surround  himself  with  experts  who  sit  in  judg- 
ment on  the  acts  of  his  associates  in  the  municipal  govern- 
ment. In  the  prosecution  of  public  work,  for  instance,  he 
may  assume  to  decide  whether  the  work  has  been  done  in 
accordance  with  contracts  and  specifications,  and  if,  in  his 
opinion,  it  has  not,  may  withhold  payment  for  the  same 
indefinitely.  He  may  assume  virtually  to  veto  the  acts 
and  policies  of  the  heads  of  other  departments  by  with- 
holding or  threatening  to  withhold  payments  that  are  or 


182  MUNICIPAL  PUBLIC   WORKS 

would  be  necessary.  Such  extraordinary  power  may 
sometimes  serve  a  useful  purpose,  but  it  is  certainly 
contrary  to  the  true  principle  of  government  which  dic- 
tates that  heads  of  departments  shall  be  individually  held 
responsible  for  their  actions  to  the  appointing  power  alone, 
whether  it  be  the  mayor,  the  council,  or  other  authority. 
The  comptroller  may  and  should,  of  course,  take  appro- 
priate and  prompt  action  where  he  has  reason  to  believe 
that  extravagance,  error,  or  fraud  exists ;  but  where  ques- 
tions of  policy  or  of  administration  are  alone  involved,  he 
should  not  be  allowed  to  interfere.  It  is  absurd,  for 
instance,  to  permit  him  to  exercise  his  judgment  in 
technical  matters  about  which  he  is  supposed  to  know 
little  or  nothing,  or  to  interpret  engineering  specifications, 
and  decide  whether  or  not  they  have  been  compUed  with. 
Such  functions  belong  to  the  properly  constituted  technical 
authorities  and  the  engineering  department,  who  may  and 
should  be  lield  strictly  accountable.  Even  if  the  comp- 
troller is  fully  competent  to  deal  with  such  matters, 
interference  is  quite  sure  to  give  rise  to  differences  and 
antagonisms  which  not  only  cripple  the  efficiency  of  the 
departments,  but  often  tend  needlessly  to  weaken  the 
confidence  of  the  public  in  its  duly  constituted  authori- 
ties. When  it  is  remembered  that  the  comptroller, 
particularly  if  elected  by  the  council  (as  proposed  in 
"A  Municipal  Program "i),  is  as  likely  to  be  fallible  as 
the  head  of  any  other  department,  and  may,  besides,  lack 
the  special  qualifications,  even  with  the  assistance  of  his 

1  "A  Municipal  Program,"  Report  of  a  committee  of  The  National 
Municipal  League,  adopted  by  the  League,  November  17,  18'J9,  together 
with  explanatory  and  other  papers.     1900. 


UNIFORM   MUNICIPAL  ACCOUNTING  183 

experts,  that  are  supposed  to  be  essential  in  those  heads 
of  departments,  it  seems  not  only  unnecessary  but  very 
unwise  to  clothe  this  officer  with  greater  power  than 
legitimately  belongs  to  his  office. 

By  the  term  "  uniform  municipal  accounts "  is  meant 
the  general  adoption  by  municipal  corporations  of  a  com- 
mon system  of  accounting  in  which  uniform  principles 
and  methods  shall  govern,  both  as  to  the  heads  of  accounts 
and  the  particular  items  that  shall  be  charged  to  each. 
Incidentally  it  contemplates  the  adoption  and  use  of  accu- 
rate and  approved  accounting  by  each  individual  city, 
since,  to  be  of  value  for  purposes  of  comparison,  the  in- 
formation disclosed  must  be  complete  and  accurate,  as 
well  as  that  it  must  conform  to  a  uniform  system.  The 
object  sought  to  be  attained  is  not  only  to  give  the  offi- 
cers and  taxpayers  of  any  city  a  correct  and  adequate 
knowledge  of  the  affairs  of  the  corporation,  but  to  enable 
them,  as  well  as  others,  to  judge  of  the  efficiency  and 
economy  with  which  the  corporation  business  is  trans- 
acted, as  compared  with  other  municipal  corporations. 
Unless  the  accounts  of  two  cities  are  made  up  on  the 
same  basis,  embracing  the  same  elements  and  details,  no 
intelligent  comparison,  one  with  the  other,  can  be  made. 
Illustrations  of  this  fact  are  common  in  attempting  to 
compare  the  cost  of  pavements  and  other  work  in  various 
cities.  One  city  may  report  the  average  cost  of  asphalt 
pavements  at  -fl.SO  per  square  yard,  while  another  may 
report  it  as  costing  $2.40  per  square  yard.  This  seems  a 
wdde  and  unaccountable  difference  until  it  is  learned  that 
in  one  city  the  price  covers  only  the  asphalt  surface  proper, 
the  excavation,  rolling,  and   concrete  foundation   being 


184  MUNICIPAL  PUBLIC  WORKS 

paid  for  as  separate  items,  while  in  the  other  the  price  in- 
cludes these  items.  This  lack  of  uniformity  and  com- 
pleteness will  be  encountered  in  almost  every  department 
of  municipal  work  in  attempting  to  compare  the  results 
in  one  city  with  thtjse  in  another.  When  one  city  reports 
that  the  cost  of  street  cleaning  has  been  a  stated  price 
per  mile  of  street  or  per  capita  of  population,  and  another 
reports  the  cost  as  fifty  per  cent  greater  for  service  pre- 
sumed to  be  identical,  we  are  justified  in  concluding  that 
the  difference  is  one  largely  of  accounting,  rather  than  of 
management,  but  we  cannot  feel  certain  of  this  until  we 
know  whether  both  accounts  are  made  up  on  the  same 
basis  and  embrace  the  same  items. 

Comparison  of  the  cost  of  any  work  or  service  in  one 
city  with  that  of  the  same  work  or  service  in  other 
cities,  making  due  allowance  for  differing  conditions,  is 
the  only  practicable  test  of  the  relative  economy  with 
which  the  business  of  any  city  is  conducted,  and  conse- 
quently it  is  obviously  of  great  importance  that  reports 
of  such  cost  should  be  upon  some  uniform  basis,  so  that 
results  may  be  comparable.  Differing  conditions  and 
varying  cost  of  materials  in  different  cities  will  always 
cause  the  cost  of  similar  work  in  them  to  differ  more 
or  less,  but  with  full  explanation  of  the  conditions,  and 
records  of  cost  of  supplies,  extravagance  or  mismanage- 
ment in  any  city  might  be  more  easily  and  quickly  detected, 
and  checks  and  remedies  provided,  than  is  possible  now. 
It  is  probable  that  no  such  wide  differences  in  cost  of 
work  and  service  as  the  reports  we  often  see  seem  to 
indicate,  actually  occur,  and  that  the  charges  of  reckless- 
ness and  extravagance  so  often  heard  against  city  officials 


UNIFORM  MUNICIPAL  ACCOUNTING  185 

may  be  traced   to  bookkeeping  methods  rather  than  to 
mismanagement  or  to  more  serious  dereliction. 

The  present  active  movement  in  favor  of  uniform  ac- 
counting is  largely  due  to  the  efforts  of  the  associations  of 
municipal  officers  and  the  various  technical  societies  in 
this  country,  tlie  members  of  which  have  long  felt  the 
necessity  for,  and  understood  the  value  of,  intelligent  com- 
parison of  cost  of  work  and  service,  one  city  with  another. 
Most  of  these  organizations  have  appointed  committees  to 
assist  in  promoting  accurate  and  uniform  accounting,  and 
their  efforts  are  already  meeting  with  a  degree  of  success 
that  is  very  promising.  Some  of  the  associations  whose 
work  is  confined  to  a  special  field  have  already  secured 
the  adoption  of  uniform  schedules  of  accounts  and  reports 
relating  to  their  special  departments.  Thus  the  New 
England  Water  Works  Association  has  brought  about  the 
adoption  of  a  complete  uniform  schedule  in  reporting  the 
accounts  and  statistics  of  water  works  under  the  control 
of  its  members.  The  National  Electric  Light  Association 
is  engaged  in  a  similar  effort.  The  city  of  Newton,  Mas- 
sachusetts, has  recently  adopted  a  provisional  schedule  of 
accounts  in  line  with  the  most  advanced  ideas  upon  the 
subject,  and  the  Department  of  Statistics  of  the  City  of 
Boston  is  making  an  effort  to  apply  like  methods  to 
the  accounts  of  that  city.  It  is  hardly  consistent  with 
the  plan  of  this  book  to  go  at  length  into  these  details 
concerning  what  is  being  done,  as  this  information 
can  be  found  in  the  reports  of  the  various  associations 
and  in  the  various  periodicals  dealing  with  such  matters. 
Our  present  object  is  to  deal  rather  with  the  principles 
involved. 


186  MUNICIPAL  PUBLIC  WORKS 

As  before  remarked,  the  general  use  of  uniform  ac- 
counts and  reports  must  go  hand  in  hand  with  correct 
bookkeeping  and  the  adoption  and  use  of  the  necessary- 
schedules  and  forms  by  the  individual  cities.  At  present, 
in  most  of  the  states,  this  can  be  accomplished  only  by  the 
voluntary  action  of  the  individual  cities,  and  there  is 
reason  to  fear  that  the  process  will  be  a  slow  one,  as  it 
seems  difficult  to  arouse  an  active  interest  in  the  matter 
in  many  city  governments.  The  desired  end  could  be 
attained  much  more  rapidly  and  certainly  by  legislative 
action  on  the  part  of  each  state.  A  considerable  number 
of  the  states  now  require  the  submission  to  some  state 
official  by  the  private  or  semi-private  corporations,  of  re- 
ports of  their  business,  upon  a  prescribed  uniform  sched- 
ule, and  the  same  principle  might  be  applied  to  the 
municipal  corporations.  This  has,  in  fact,  been  attempted 
in  one  or  two  states  already  with  promising  results. 

In  a  general  way  statutes  of  this  character  should 
provide  :  — 

First,  that  some  officer  or  department  of  the  state 
shall  be  designated  to  receive  and  audit  the  accounts  of 
all  municipal  corporations  chartered  by  the  state. 

Second,  that  said  officer  or  department  shall  have  power 
to  prepare  and  to  require  the  use  of  a  suitable  system  of 
bookkeeping  for  municipal  corporations,  and  to  prescribe 
forms  and  schedules  of  reports  to  be  made  by  each  such 
corporation  at  designated  times,  these  reports  to  be  at- 
tested under  oath  by  the  accounting  dei:)artment  of  the 
corporation. 

Third,  the  state  officer  or  department  shall  be  em- 
powered and  directed  to  examine  the  books  and  audit  the 


UNIFORM   MUNICIPAL   ACCOUNTING  187 

accounts  and  reports  of  each  corporation,  and  shall  certify 
to  their  correctness. 

Fourth,  these  reports  shall  be  published  by  the  state 
annually. 

Fifth,  suitable  penalties  shall  be  prescribed  and  en- 
forced to  compel  the  municipal  corporations  to  comply 
with  the  requirements  of  the  law. 

There  can  be  no  valid  objection  to  the  enactment  and 
enforcement  of  such  a  state  law.  The  utility  of  the 
reports  rendered  would,  of  course,  depend  upon  the 
completeness  and  detail  of  the  schedules  and  instructions 
prescribed  by  the  state,  and  these  should  be  prepared 
with  great  care  in  conformity  with  the  best  theory  and 
practice. 

It  is  not  unlikely  that  experience  would  disclose  defects 
in  any  system  first  adopted,  but  it  could  be  modified  from 
time  to  time  as  necessity  or  expediency  might  make 
changes  advisable.  Such  legislation  by  the  several 
states  would  undoubtedly  bring  about  the  desired  results 
most  effectually  and  in  the  shortest  time,  in  each  individ- 
ual state.  But  any  measure  of  this  kind  would  fall 
short  of  what  is  needed  if  it  did  not  also  secure  the 
same  degree  of  uniformity  in  the  requirements  of  the 
several  states.  Since,  under  our  form  of  government, 
legislation  of  this  character  is  reserved  to  the  states 
alone,  we  must  depend  upon  securing  such  uniformity 
in  state  laws  as  will  render  the  system  effective  and 
satisfactory.  This  can  be  best  brought  about  through 
the  agency  and  influence  of  the  technical  and  economic 
societies  and  associations,  aided  by  the  efforts  of  individ- 
uals interested  in  the  matter.     It  is  therefore  desirable 


188  MUNICIPAL   PUBLIC  WORKS 

and  important  that  the  work  of  these  organizations 
should  be  encouraged  and  supported  in  every  practi- 
cable way,  and  that  they  should  be  seconded  by  every 
municipal  officer  and  every  friend  of  good  municipal 
government. 


CHAPTER  XIV 
MUNICIPAL  OWNERSHIP 

No  question  relating  to  city  government  or  municipal 
economics  has  in  recent  years  been  discussed  with  more 
interest  and  zeal  on  both  sides  than  that  of  whether  it  is 
best  for  municipal  corporations  to  own  outright  and 
operate  plants  for  supplying  public  utilities.  So  great 
has  often  been  the  zeal  of  those  who  have  been  engaged 
in  this  discussion,  whether  on  the  one  side  or  on  the 
other,  and  so  exaggerated  have  been  the  statements  and 
claims  made,  that  the  careful  student  is  often  bewildered 
and  confused  as  to  the  real  facts  and  the  sober  arguments 
upon  the  basis  of  which  the  question  must  in  the  end  be 
answered. 

Without  attempting  to  go  into  minor  details,  and  with- 
out considering  the  statistics  so  freely  flung  about,  regard- 
less of  their  verity  or  value,  let  us  attempt  to  consider 
the  principles  involved  and  the  admitted  facts  available, 
with  the  view,  not  of  deciding  the  question,  but  of  learn- 
ing what  appears,  at  this  time,  the  most  rational  conclu- 
sion. It  is  a  question  that  must,  in  the  end,  be  answered 
by  established  facts  and  sound  business  judgment.  To 
becloud  the  real  issues  by  irrelevant  and  exaggerated 
discussion  is  only  to  retard  actual  progress  toward  a 
final  solution.  Neither  Utopian  schemes  of  reform, 
extravagant    predictions    based    upon    theories    of     the 

189 


190  MUNICIPAL   PUBLIC  WORKS 

perfect  municipal  government,  wild  estimates  of  econo- 
mies attainable,  or  charges  of  rapacity  and  corruption 
against  present  corporations,  on  the  one  hand ;  nor  claims 
of  vested  rights,  unfair  treatment,  or  violated  functions  of 
government,  on  the  other,  can  have  very  much  weight  in 
enabling  us  to  reach  a  final  conclusion.  If  in  the  end 
it  shall  appear  that  the  interests  of  the  citizen  may  be 
best  served,  and  the  greatest  good  to  the  greatest  num- 
ber secured  by  municipal  ownership  and  operation  of 
public  utilities,  that  plan  will  prevail,  regardless  of 
minor  considerations  or  of  personal  interests. 

The  principal  claim,  and  obviously  the  most  important 
one,  advanced  by  those  who  favor  municipal  ownership, 
is  that  better  and  cheaper  service  can  be  given  to  the 
citizen  and  taxpayer  under  this  system  than  under  a 
system  of  private  ownership.  Into  the  consideration  of 
this  main  question  several  elements  enter  which  may  be 
stated  as  follows  :  — 

First :  Considered  simply  as  an  elementary  question, 
there  are  no  inherent  or  latent  reasons  why  service  under 
the  one  system  may  not  be  as  good  and  as  economical  as 
service  under  the  other.  All  other  things  being  equal, 
a  pound  of  coal  will  not  yield  more  units  of  heat,  those 
units  of  heat  will  not  convert  more  water  into  steam,  that 
steam  cannot  be  transformed  into  more  power,  and  that 
power  cannot  be  made  to  render  more  service,  under  one 
ownership  than  under  another.  This  is  a  self-evident 
proposition,  which  it  would  seem  unnecessary  to  state 
were  it  not  for  the  fact  that  some  enthusiastic  debaters 
seem  to  ignore,  and  statistics,  often  quoted,  seem  to  belie 
it.     Assuming  its  truth,  it  follows  that,  speaking  gener- 


MUNICIPAL  OWNERSHIP  191 

ally,  any  difference  in  the  amount  or  quality  of  service 
secured  by  the  expenditure  of  a  dollar  in  one  case  as  com- 
pared with  another  must  be  accounted  for  by  a  difference 
in  knowledge  or  skill,  or  in  economy  in  the  management 
of  those  in  charge  of  such  expenditure.  Nor  is  there  any 
inherent  reason  why  one  man  or  corporation  may  not  pos- 
sess, or  be  able  to  secure,  the  necessary  knowledge,  skill, 
and  economy  as  well  as  another.  Neither  a  private  nor  a 
municipal  corporation  may  or  can  have  a  monopoly  of 
brains.  Essentially,  then,  the  problem  of  first  cost  is  one 
of  skilful  and  efficient  management,  and  the  practical 
question  becomes  :  Are  there  any  reasons  why  a  public 
utility  plant  cannot  be  managed  as  well  and  as  eco- 
nomically by  a  municipal  as  by  a  private  corporation  ? 

Second:  The  advocates  of  municipal  ownership  assert 
that,  the  market  for  knowledge  and  skill  being  open  to 
all,  the  municipality  has  the  same  opportunity  to  secure 
the  best  executive  ability  and  technical  skill,  and  the 
most  efficient  labor,  as  has  the  private  corporation ;  that, 
in  fact,  its  opportunity  is  rather  better,  because,  as  a  rule, 
the  municipal  corporation  pays  higher  wages  and  requires 
shorter  hours,  and  because  the  employee  of  the  city 
will  consider  his  wages  less  liable  to  default,  and  his 
position  more  secure,  than  will  the  employee  of  a 
private  corporation,  and  for  these  reasons  he  is  likely 
to  be  more  interested  in  his  work,  and  to  labor  with 
more  zeal  than  he  otherwise  would.  The  advocates  of 
private  ownership,  on  the  contrary,  assert,  to  begin 
with,  that  while  it  is  true  that  the  municipality  is 
free  to  secure  its  talent  and  labor  in  the  open  market, 
its  executives  are  not,  as  a  rule,  as  capable  of  judging 


192  MUNICIPAL  PUBLIC   WORKS 

of  the  capacity  and  skill  of  the  men  required  to  manage 
a  special  business  as  are  the  private  managers  of  similar 
enterprises,  who  have  usually  acquired,  through  long 
experience,  a  knowledge  of  the  special  qualifications  re- 
quired to  operate  that  particular  kind  of  business.  When 
it  is  considered  that  the  average  city  official,  if  not  a  pro- 
fessional man  or  politician,  is  chosen  from  the  ranks  of 
men  engaged  in  ordinary  business,  and,  however  able  he 
may  be  in  his  own  province,  is  likely  to  be  deficient  in 
the  knowledge  of  and  training  for  the  special  business 
with  which  he  is  called  upon  to  deal,  it  must  be  admitted 
that  the  point  seems  well  taken.  It  is  pointed  out,  also, 
that  the  short  tenure  of  office  common  in  city  govern- 
ments often  results  in  the  displacement  of  studious  and 
able  officials  about  as  soon  as  they  have  had  time  to  acquire 
an  expert  knowledge  of  any  public  business  which  they 
may  be  called  upon  to  manage. 

It  is  argued,  further,  that  everyday  experience  proves 
that  laborers  and  other  employees  of  a  municij^al  corpora- 
tion do  not  work  as  hard  or  as  efficiently  as  those  of  pri- 
vate employers,  and  that  increasing  the  pay  and  shortening 
the  hours  of  employees  almost  invariably  increases  the 
cost  of  production  in  any  business,  particularly  if  the  men 
have  not  been  overworked  or  underpaid  before  the  mak- 
ing of  the  change.  It  is  therefore  asserted  that  under 
municipal  ownership  the  efficiency  of  the  management 
from  the  top  to  the  bottom  of  the  scale  of  employees  is 
nearly  always  inferior  to  that  in  private  corporations.  It 
is  also  assorted  tliat  as  a  rule  materials  and  supplies  of  a 
given  quality  can  be  purchased  more  economically  by  a 
private  than  by  a  municipal   corporation  ;    that,  even  if 


MUNICIPAL  OWNERSHIP  193 

political  influence  and  private  jobbery  be  eliminated,  the 
purchase  of  supplies  by  the  municipality  is  hedged  about 
by  so  many  requirements  and  so  much  "  red  tape  "  that 
advantage  cannot  be  taken  of  fluctuations  in  the  market, 
commercial  exigencies,  and  favorable  conditions,  as  they 
may  be  by  the  private  owner.  In  regard  to  this  it  may 
be  remarked  that  while,  theoretically,  there  is  no  sound 
reason  why  a  municipality  should  not  be  able  to  purchase 
its  materials  and  supplies  at  as  low  a  price  and  of  as 
good  a  quality  as  can  a  private  corporation,  experience 
seems  to  prove  that  as  a  rule  it  does  not  do  so.  So  far 
as  first  cost  of  production  is  concerned,  the  private  cor- 
poration seems,  upon  the  whole,  to  have  the  advantage. 

It  is  not,  however,  first  cost  of  production,  but  the  cost 
of  the  finished  article  or  service  when  delivered  to  the 
consumer,  that  is  to  be  considered.  The  private  owner 
conducts  the  business  for  profit,  and  that  profit  must  be 
added  to  first  cost  in  fixing  the  price  of  the  commodity  to 
the  municipality.  The  municipality,  on  the  other  hand, 
expects  no  profit,  its  sole  object  being  to  supply  the  com- 
modity or  the  service  to  its  citizens  at  the  lowest  possible 
price.  Unless,  therefore,  the  profit  demanded  be  less  than 
the  difference  in  first  cost  between  the  private  and  the 
municipal  producer,  the  product  should  be  delivered  to 
the  consumers  at  a  less  cost  under  municipal  than  under 
private  control.  The  question  of  the  profit  demanded  by 
the  private  corporation  therefore  becomes  a  most  im- 
portant one  in  dealing  with  the  problem.  It  is,  in  fact, 
the  principal  bone  of  contention  in  the  controversy. 

It  is  admitted  on  all  hands  that  the  private  owner  is 
entitled  to  a  reasonable  profit  on  the  cost  of  production. 


194  MUNICIPAL   PUBLIC   WORKS 

It  is  contended,  however,  by  the  advocates  of  municipal 
ownership,  that  the  private  corporations  demand  and 
manage  to  extort  an  unreasonable  and  unusual  profit. 
If  the  question  could  be  narrowed  down  to  the  one  of 
what  is  a  fair  percentage  of  profit  upon  the  exact  cost  of 
production,  it  would  be  greatly  simplified.  But  the 
public  does  not  usually  know  and  cannot  obtain  the  true 
first  cost,  and  partly,  at  least,  because  the  owners  refuse 
to  divulge  the  facts  and  submit  them  to  verification,  peo- 
ple conclude  that  these  facts  are  withheld  because  they 
would  disclose  unreasonable  profits.  It  is  asserted  and 
believed  that  the  private  corporations  inflate  their  capital 
stock  to  make  the  dividends  declared  appear  reasonable ; 
that  many  such  stocks  are  thus  "  watered "  to  such  an 
extent  that  the  total  capitalization  is  from  two  to  five  or 
more  times  the  money  actually  invested,  so  that  a  five  per 
cent  dividend  on  the  capital  stock  would  mean  from  ten 
to  fifty  or  more  per  cent  upon  the  actual  investment. 
There  are  abundant  facts  to  establish  the  truth  of  these 
assertions  in  many  cases,  and  good  reason  to  believe  that 
inflation  of  capital,  in  whatever  way  it  may  be  accom- 
plished, is  resorted  to  in  most  cases.  On  the  other  hand, 
people  are  quite  likely  to  underestimate  the  amount  of 
capital  legitimately  invested,  as  well  as  the  operating  ex- 
penses of  such  a  corporation,  and  so  to  place  the  amount 
of  reasonable  profit  at  too  low  a  figure.  Both  causes 
operate  to  convince  the  public  that  the  profits  demanded 
and  received  are  exorbitant,  and  the  prices  at  which  ser- 
vice is  supplied  are  unnecessarily  and  unreasonably  high. 
There  is  tlius  a  wide  difl'erence  upon  tliis  point  between 
the  statements  of  the  private  owners  and  the  belief  of  the 


MUNICIPAL   OWNERSHIP  195 

advocates  of  municipal  ownership.  It  is  probably  true 
that  the  cost  of  production  is  much  greater  than  is  popu- 
larly believed,  but  on  the  whole  the  advocates  of  munici- 
pal ownership  seem  to  have  the  better  of  the  argument  in 
this  branch  of  the  subject. 

In  regard  to  the  rate  of  profit  that  may  reasonably  be 
demanded,  it  will  hardly  be  contended  that  it  should  not 
be  greater  than  the  prevailing  rate  of  interest.  The 
market  rate  of  interest  is,  practically,  based  upon  what 
the  use  of  money  is  worth,  and  is  not  affected  to  any 
material  extent  by  the  possible  contingency  of  loss. 
Loans  must  be  amply  secured  or  they  cannot  be  obtained 
at  any  ordinary  rate  of  interest.  Investments  in  indus- 
trial enterprises  are,  to  a  greater  or  less  extent,  without 
such  security.  The  possibilities  that  they  will  not  yield  a 
profit,  and  may  not  even  return  the  principal,  are  so  great 
that  no  capitalist  will  embark  in  them  unless  tempted  by 
the  promise  of  much  larger  returns  than  the  prevailing 
rate  of  interest.  It  may  be  stated  as  a  rough  rule  that  a 
capitalist  is  not  justified  in  putting  his  money  into 
industrial  enterprises  unless  there  appears  reasonable 
promise  that  dividends  will  be  two  or  three  times  the 
prevailing  rate  of  interest.  Thus,  if  the  rate  of  interest 
be  five  per  cent,  dividends  of  from  ten  per  cent  to  fifteen 
per  cent  cannot  be  considered  unreasonable.  There  may, 
of  course,  be  conditions  and  considerations  that  would 
make  a  lower  rate  of  dividend  acceptable.  Thus  the 
stocks  of  railroad  companies  and  many  established  indus- 
trial companies,  listed  on  the  stock  exchanges,  can  usually 
be  sold  at  any  time,  and  if  the  owner  of  them  distrusts 
their  ultimate  value,  he  can  usually  dispose  of  them  and 


196  MUNICIPAL  PUBLIC  WORKS 

turn  them  into  cash  at  short  notice  and  before  any  very- 
serious  loss  occurs.  In  the  case  of  many  corporations  a 
permanent  market  for  their  products  is  well  assured,  and 
their  prospects  of  commercial  success  are  greatly  increased 
by  the  fact  that  their  franchises  protect  them  more  or  less 
from  competition.  This  is  usually  the  case  with  the 
quasi  public  corporations  which  are  the  subjects  of  this 
discussion.  But,  even  in  these  cases,  there  remain  such 
contingencies  that  a  profit  of  double  the  prevailing  rate 
of  interest  cannot  be  considered  unreasonable.  As  the 
capital  of  such  enterprises,  whether  owned  by  municipal 
or  private  corporations,  is  usually  borrowed,  and  as  the 
interest  charge  must  be  first  paid  out  of  the  earnings  be- 
fore dividends  can  be  paid  to  stockholders,  these  "fixed 
charges  "  may  be  neglected  in  any  comparison,  or  may  be 
considered  a  part  of  the  running  expenses.  It  must  be 
noted,  however,  that  where  a  private  corporation  borrows 
the  whole  of  its  money  capital,  as  by  the  sale  of  bonds, 
the  only  capital  contributed  by  the  stockholders  is  that 
represented  by  the  franchise  rights,  the  "  good  will "  of 
the  concern,  and  the  responsibility  which  their  names 
may  lend  to  the  business.  It  is  usually  difficult  to  place 
a  money  value  upon  these,  or  to  determine  the  dividends 
to  which  they  are  entitled. 

It  must  be  noted  also  that  municipalities  can  usually 
borrow  money  at  a  lower  rate  of  interest  than  can  private 
corporations,  and  whatever  this  difference  may  be,  it 
should  be  credited  to  the  operating  account  of  municipal 
ownership. 

The  practice  of  inflating  (watering)  stocks  beyond  their 
true  value,  i.e.  the  actual  sum  invested,  while  often  a  very 


MUNICIPAL   OWNERSHIP  197 

attivactive  and  profitable  operation  to  the  owners,  cannot 
be  justified,  in  the  case  of  the  quasi  public  corporations, 
upon  any  ground  of  justice  or  of  sound  economics.  Their 
case  is  quite  different  from  that  of  purely  private  corpora- 
tions. They  owe  their  existence  to  an  agreement  between 
the  municipality  and  themselves,  one  of  the  implied  if 
not  stated  conditions  of  which  is  mutual  benefit  to  the 
contracting  parties.  The  private  corporation  usually 
receives  some  concession  or  some  guaranty  from  the 
municipality  equivalent  to  capital,  for  which  it  (the 
municipality)  is  entitled  to  a  consideration,  and  to  a  share 
in  the  benefits  of  the  compact.  In  strict  justice,  neither 
party  has  a  right  to  conceal  from  or  misrepresent  to  the 
other,  for  the  purpose  of  securing  an  advantage  thereby, 
the  true  condition  of  the  business.  When,  therefore,  a 
private  corporation,  being  a  party  to  such  a  contract, 
resorts  to  the  inflation  of  its  capital  in  order  to  create  the 
impression  that  it  is  earning  only  reasonable  profits,  or 
for  any  other  purpose,  it  commits  an  act  which  is  wrong 
in  morals  and  wrong  in  equity,  whatever  may  be  its  legal 
status.  There  are,  however,  extenuating  circumstances 
that  deserve  consideration.  Private  corporations  often 
enter  into  contracts  with  small  but  growing  municipalities 
to  supply  public  utilities  upon  terms  which  must  result  in 
loss  instead  of  profit  for  years  to  come.  They  do  this 
upon  the  reasonable  expectation  that  the  growth  of  the 
municipality  will  in  time  increase  the  value  of  the  busi- 
ness, so  that,  in  the  end,  not  only  will  these  early  losses 
be  recouped,  but,  upon  the  whole,  a  good  profit  will  be 
secured.  This  is  a  legitimate  and  perfectly  fair  business 
risk,  without  which  the  younger  and  smaller  cities  would 


198  MUNICIPAL   PUBLIC  WORKS 

often  not  be  able  to  secure  upon  reasonable  terms  the 
service  desired.  When  the  private  corporation  has  thus 
for  years  realized  no  profit  and  may  have  sustained  actual 
loss  in  carrying  out  its  engagements,  it  is  clearly  entitled 
to  compensation  when  more  prosperous  times  come  with 
the  growth  and  expansion  of  the  city.  Conditions  of 
this  kind  are  entitled  to  just  consideration  in  judging  of 
the  reasonableness  of  present  profit,  and  the  private  cor- 
poration should  not  be  tempted  or  forced  to  resort  to 
questionable  methods  to  secure  what  is  fairly  due  to  it. 

It  ought  to  be  possible  so  to  frame  and  administer  con- 
tracts between  the  municipality  and  the  private  owner  of 
public  utilities  that  inflation  of  capital  could  be  prevented, 
the  rate  of  profit  fixed,  and  all  net  earnings  in  excess  of 
that  rate  divided  in  some  agreed  ratio  between  the  mu- 
nicipality and  the  owner.  If  this  should  be  successfully 
accomplished,  one  of  the  strongest  present  arguments  for 
municipal  ownership  would  lose  the  greater  part  of  its 
force,  and  the  discussion  would  be  confined  to  compara- 
tively narrow  limits.  In  the  next  chapter  this  phase  of 
the  question  will  be  considered. 

Another  matter  which  enters  into  the  discussion  relates 
to  the  wisdom  and  propriety,  on  the  part  of  the  munici- 
pality, of  investing  the  large  sums  required  in  the  con- 
struction of  plants  for  supplying  public  utilities.  The 
importance  of  the  question  becomes  greater  where,  as  in 
many  cases,  a  debt  limit  is  fixed  by  the  state  constitution 
or  by  state  legislation.  On  the  one  side  it  is  argued  that 
a  debt  contracted  for  the  establishment  of  a  business  en- 
terprise which  will  be  not  only  self-supporting  but  will 
provide  from  its  earnings  a  sinking  fund  for  the  ultimate 


MUNICIPAL   OWNERSHIP  199 

extinction  of  the  debt,  is  really  not  such  an  obligation  a* 
is  ordinary  indebtedness,  and  should  be  distinctly  excepted 
from  the  operation  of  laws  that  are  otherwise  necessary 
and  salutary.  Since  such  indebtedness  does  not  depend 
for  its  extinction  upon  ordinary  taxation,  the  argument 
is  undoubtedly  sound,  provided  that  the  success  of  the 
enterprise  is  reasonably  certain.  But  it  is  said,  on  the 
other  hand,  that  the  financial  success  of  all  such  enter- 
prises is  problematic,  and  that  it  is  therefore  unsound  as 
a  business  proposition  to  assume  that  they  will  meet  the 
expectations  of  their  projectors  and  be  entirely  self-sup- 
porting to  the  extent  of  taking  care  of  the  debt  incurred 
for  their  installation,  and  that  therefore  debts  thus 
incurred  can  never  be  considered  as  involving  no  liability 
upon  the  taxpayers.  It  is  undoubtedly  true  that  the 
business  man  who  is  in  debt,  however  good  may  be  his 
prospects  of  meeting  his  indebtedness,  never  can  feel  en- 
tirely secure  until  it  is  paid  off,  and  the  fact  of  the  obli- 
gation materially  affects  his  credit  rating.  The  same 
law  must  necessarily  apply  with  more  or  less  force  to  the 
municipal  debtor.  Unexpected  and  unforeseen  conditions 
or  casualties  may  occur  through  the  operation  of  which  a 
project  may  be  a  failure  as  a  business  enterprise,  and  the 
municipality  may  be  called  upon  to  meet  the  obligation 
incurred,  by  taxation  or  from  other  sources  of  revenue. 
While  ordinary  casualties,  such  as  the  destruction  of  build- 
ings and  machinery  by  fire,  may  be  provided  against  by 
insurance,  the  insurance  will  seldom  cover  the  whole  loss, 
and  there  will  generally  be  a  large  part  of  the  investment 
that  is  not  insurable.  An  illustration  is  the  case  of  the 
city  of  Austin,  Texas,  where  a  relatively  enormous  debt 


200  MUNICIPAL   PUBLIC  WORKS 

was  incurred  by  the  municipality  in  the  building  of  a  dam 
to  supply  power  for  operating  its  water  and  lighting 
plants.  Not  only  was  the  enterprise  commercially  unsuc- 
cessful, but  the  dam,  constructed  at  great  cost,  and  not 
insurable,  was  destroyed  by  an  unusual  freshet  in  the 
river,  resulting  in  the  practical  bankruptcy  of  the  city. 
Sound  business  principles  undoubtedly  dictate  that  it  is 
not  wise  or  prudent  for  municipalities  to  incur  debts  of 
this  character  if  public  utilities  can  be  supplied  otherwise 
at  reasonable  cost.  Our  American  cities  are  usually 
sufficiently  burdened  with  other  debts  that  cannot  well 
be  avoided,  and  wherever  private  capital  can  be  induced 
to  provide  public  utilities  upon  fair  and  reasonable  terms 
it  would  seem  wise  to  avoid  the  heavy  obligations  that 
municipal  ownership  must  involve. 

It  is  well  to  note  in  this  connection  that  original 
estimates  of  the  cast  of  a  prospective  enterprise  may 
prove  to  be  unreliable  and  misleading,  particularly  if 
made  by  municipal  officers  without  large  experience  in 
the  special  business  in  view.  This  is  illustrated  in  the 
experience  of  the  city  of  Detroit  with  its  municipal  elec- 
tric lighting  plant.  The  original  estimate  of  cost,  upon 
the  basis  of  which  the  enterprise  was  entered  upon,  and 
which  was  thought  to  be  ample,  was  t|600,000.  The  cost 
of  construction  and  equipment  at  the  time  the  plant  was 
put  in  operation  was  stated  to  be  (report  of  June  30th, 
1896)  1633,141,  which  was  a  very  close  approximation  to 
the  estimate,  but  it  was  soon  found  that  the  plant  was  in- 
adequate and  tliat  additional  machinery  had  to  be  provided, 
and  the  total  investment  on  June  30,  1899,  was  reported 
as  $833,803.     This   meant    not    only   largely   increased 


MUNICIPAL  OWNERSHIP  201 

indebtedness,  but  an  increase  of  one-third  in  interest 
charges  to   be  added  to  the  cost  of  service. 

The  advocates  of  municipal  ownership  claim  that 
reports  and  statistics  show  conclusively  that  where 
plants  supplying  public  utilities  are  owned  and  operated 
by  the  municipality,  a  saving,  and  generally  a  very  large 
saving,  in  cost  has  resulted,  and  that  on  the  evidence  of 
these  reports  the  wisdom  and  economy  of  municipal 
ownership  are  undeniable.  To  this  it  is  replied  that  such 
reports  are  generally  incomplete,  inaccurate,  and  there- 
fore unreliable,  and  prove  nothing.  It  is  not  asserted  that 
they  are  purposely  made  to  be  misleading,  but  that  their 
deceptiveness  is  due  to  faulty  bookkeeping  and  failure  to 
charge  the  service  with  all  the  items  of  cost  that  go  to 
make  up  the  real  aggregate.  Thus,  in  some  of  them 
interest  on  the  investment  is  omitted  and  no  provision 
made  for  a  sinking  fund  ;  in  many  others  no  allowance 
is  made  for  depreciation  on  buildings  and  machinery, 
nothing  is  charged  for  insurance  of  various  kinds,  nor  for 
state  taxes,  and  no  consideration  is  given  to  the  municipal 
taxes  that  would  have  been  collected  from  a  private  owner. 
It  must  be  admitted  that  these  defects,  or  at  least  some  of 
them,  appear  to  exist  in  too  many  of  these  accounts,  and 
that  statements  of  cost  based  on  them  must  therefore  be 
rejected,  or  supplemented  by  fuller  information. 

An  instance  of  this  kind  has  already  been  given  in  a 
preceding  chapter,  where  reference  was  made  to  a  report 
by  the  municipal  authorities  of  Detroit  that  the  cost  to 
the  city  of  electric  lights  supplied  by  its  own  plant  dur- 
ing the  year  ending  June  30,  1898,  was  $51.85  per  lamp 
per  year,  whereas  it  is  asserted  that  a  careful  examination 


202  MUNICIPAL   PUBLIC   WORKS 

of  all  the  facts  showed  that  the  actual  cost,  when  every- 
thing was  charged  up  that  should  be  (except  provision 
for  a  sinking  fund),  was  894.17  per  light.  Incomplete 
and  inaccurate  accounts  and  statements  are,  of  course,  of 
no  real  value  to  either  side  in  the  discussion.  What  is 
wanted  is  not  some  truth,  but  the  whole  truth.  When  we 
have  before  us  reports  from  a  sufficient  number  of  munici- 
pal plants,  made  up  in  accordance  with  approved  standards 
of  bookkeeping,  audited  and  certified  to  by  reputable 
expert  accountants,  we  may  begin  to  study  this  branch  of 
the  subject  intelligently.  As  an  example  of  the  character  of 
statement  needed  may  be  mentioned  the  report  of  Messrs. 
Haskins  &  Sells,  certified  public  accountants  of  the  state 
of  New  York,  upon  the  municipal  lighting  plants  of  the 
city  of  Chicago,  for  the  period  from  January  1st,  1887,  to 
December  31,  1900,  —  a  report  which  may  well  be  used 
as  a  model  by  municipal  accountants.  While  we  are  not 
warranted  in  basing  general  conclusions  upon  the  results 
of  a  single  department  in  a  single  city,  some  of  the  facts 
revealed  by  this  examination  are  worth  attention  as  illus- 
trating what  has  been  said. 

It  is  a  fortunate  circumstance  that  a  part  of  Chicago  is 
lighted  by  a  private  corporation,  so  that  we  are  enabled 
roughly  to  compare  the  results  of  municipal  operation 
with  those  of  private  operation  in  the  same  city.  It 
appears  that  the  total  cost  of  lighting  by  the  municipal 
plants  during  the  period  of  thirteen  years  covered  by  the 
report  was  $2,556,533.61,  while  if  the  same  lights  had 
been  supplied  under  contract  at  the  prices  received  by 
the  private  corporation,  the  total  cost  would  have  been 
12,607,110.50,  from  which  it  appears  that  the  cost  under 


MUNICIPAL   OWNERSHIP 


203 


municipal  operation  was  849,423.11  more  than  it  would 
have  been  under  existing  contract  prices  of  the  private 
corporation.  It  appears,  however,  that  during  the  last 
year  of  the  period  (1900)  the  cost  per  lamp  under  munic- 
ipal management  was  $99. 88,  while  the  contract  price 
with  the  private  corporation  would  have  been  |il05  each 
for  2,136  lamps  and  $137.50  for  1731  lamps,  —  an  average 
of  1119.55.  A  great  reduction  was  made  in  the  cost  of 
lighting  during  the  period  by  the  municipal  plant,  largely 
due,  no  doubt,  to  the  greater  efficiency  that  comes  from 
experience  in  management.  Thus,  the  average  cost  per 
lamp  for  the  first  three  years  of  the  period  was  $195.69, 
while  that  for  the  last  three  years  was  $107.18,  —  a  de- 
crease in  cost  of  over  forty-five  per  cent. 

We  may  study  this  report  a  little  further  for  the  purpose 
of  calling  attention  to  the  caution  that  is  always  neces- 
sary in  forming  conclusions  based  on  such  reports. 

The  total  cost  of  the  service  is  subdivided  into  three 
general  heads,  each  made  up  of  a  number  of  items.  Tak- 
ing the  last  year  reported,  these  general  heads,  the  amount 
charged  to  each,  and  the  percentage  each  is  of  the  whole 
are  as  follows  :  — 


Total 

Per  cent 

^lainteuance  of  plant 

$26,460.58 
213,631.29 

146,139.98 

6.9 
55.3 

Operation,  —  estimated  cost  of  water,  in- 
surance, taxes,  depreciation,  and  interest 
on  investment 

37.8 

Total 

$386,231.85 

100.0 

204  MUNICIPAL   PUBLIC  WORKS 

It  will  be  observed  that  the  actual  operating  expense  is 
but  fif  t3'^-five  per  cent  of  the  whole, while  the  third  item,  com- 
posed of  charges  which  are  too  frequently  omitted  entirely 
from  such  reports,  is  nearly  thirty-eight  per  cent  of  the 
whole.  Accounts  of  cost  which  do  not  include  these  items 
cannot,  it  is  very  apparent,  give  any  correct  idea  of  the 
real  cost  of  the  service.  It  is  noticeable  that  in  this  report 
of  the  expert  accountants  no  charge  is  made  to  a  sinking 
fund.  It  was  presumably  omitted  under  the  assumption 
that  the  debt  could  be  refunded  perpetually  when  it 
should  fall  due.  This  may  be  true  in  the  case  of  a  munici- 
pal corporation,  though  it  is  an  unsound  principle  to  go 
upon.  It  is  particularly  unsound  in  the  case  of  a  private 
corporation,  which  is  compelled  to  recognize  the  fact  that 
it  will  probably  go  out  of  business  sooner  or  later,  and 
must  therefore  provide  for  extinguishing  its  indebtedness. 
In  this  case  the  private  corporation  doubtless  provided  for 
a  sinking  fund  in  fixing  the  prices  it  bid  for  the  service, 
and  to  make  the  comparison  fair  a  sinking  fund  charge 
should  be  made  in  figuring  the  cost  of  operating  the 
municipal  plants.  The  amount  of  the  municipal  debt 
incurred  on  account  of  these  plants  is  not  stated  in  the 
report,  but  the  total  amount  invested  in  them  seems  to  be 
something  over  -f  1,600,000,  and  at  4|  per  cent  for  thirty 
years  the  payment  to  the  sinking  fund  would  have  been, 
during  the  last  year  reported,  $26,224,  equivalent  to  $6.78 
per  year  per  lamp,  making  the  total  cost  $106.66  per 
lamp. 

We  might,  as  is  common  in  discussions  of  this  question, 
proceed  to  compare  the  cost  of  municipal  operation,  as 
given  in  this  report,  with  contract  prices  for  lighting  in 


MUNICIPAL   OWNERSHIP  205 

other  cities,  but  sucli  comparisons  would  yield  no  conclu- 
sive evidence  unless  we  knew  and  took  into  consideration 
all  the  conditions  affecting  those  contract  prices.  The 
schedule  of  lighting  (hours  during  which  lamps  burn), 
the  cost  of  coal,  special  requirements  of  contracts,  and 
numerous  other  items  are  likely  to  vary  so  greatly  in  dif- 
ferent cities  that  offhand  comparisons  of  contract  price 
per  lamp  would  be  misleading  rather  than  instructive. 
We  may  go  still  further  and  say  that  it  is  not  safe  to 
base  final  conclusions  as  to  the  relative  cost  of  the  light- 
ing in  Chicago,  by  municipal  and  by  the  private  plants, 
upon  the  figures  in  the  report.  In  the  first  place,  we  do 
not  know  the  actual  cost  to  the  private  corporation  of 
operating  the  lamps  for  which  it  receives  a  stated  price 
from  the  city.  It  is  possible,  on  the  one  hand,  that  it  may 
be  realizing  very  large  profits  or,  on  the  other  hand,  that 
it  is  supplying  the  lights  at  an  actual  loss.  The  uncer- 
tainty upon  this  point  is  increased  by  the  fact  that  a 
contract  for  lighting  the  streets  usually  carries  with  it 
the  control  of  commercial  lighting  in  the  district  cov- 
ered by  the  contract.  This  commercial  lighting,  being 
usuall}'"  free  from  competition,  and  the  price  not  often 
being  fixed  in  the  municipal  contract,  is  generally  much 
more  profitable  than  the  street  lighting,  and  private 
corporations  may,  in  order  to  secure  control  of  the  com- 
mercial lighting,  bid  a  price  for  the  public  lamps  that 
will  not  more  than  cover,  and  might  be  even  less  than, 
actual  cost,  with  the  expectation  of  making  up  from 
the  larger  profits  on  its  commercial  lighting  any  pos- 
sible loss.  It  appears,  furthermore,  that  the  two  sys- 
tems  are   not   operated   under   similar   conditions.      We 


20G  MUNICIPAL  PUBLIC   WORKS 

are  told  ^  that  the  private  corporation  works  its  em- 
ployees longer  hours  and  pays  them  less  wages  per  hour 
than  does  the  municipal  lighting  department,  and  it  is 
estimated  that  the  item  of  labor  consequently  costs  the 
municipality  from  thirty-five  to  forty-five  per  cent  more 
than  is  paid  by  a  private  corporation.  This  is  not,  it  will 
be  noticed,  in  harmony  with  the  claim  often  made  that 
shorter  hours  and  better  pay  would  not  increase  the  aggre- 
gate cost  of  labor,  but  it  emphasizes  the  fact  that  where 
conditions  are  dissimilar  we  cannot  make  just  compari- 
sons. Furthermore,  it  is  not  always  safe  to  assume  that 
under  contracts  with  private  corporations  the  contract 
price  represents  the  whole  cost  to  the  city.  Some  parts  of 
the  expense  of  'general  administration  must  be  chargeable 
to  the  supervision  of  this  quasi  public  corporation  busi- 
ness; and  it  is  nearly  always  necessary  to  maintain  a 
special  officer  or  bureau,  with  electricians,  inspectors,  and 
other  employees,  to  see  that  contract  terms  are  complied 
with,  etc.,  and  the  cost  of  all  such  expenses  must  be  added 
to  the  contract  price,  in  order  to  arrive  at  the  true  cost  of 
the  service  to  the  municipality.  It  will  thus  be  seen  that, 
even  with  complete  and  verified  accounts  before  us,  it  is 
unsafe  to  jump  at  conclusions  and  assume  to  decide  off- 
hand that  municipal  ownership  is  profitable  or  unprofit- 
able. What,  then,  shall  we  say  of  the  army  of  writers 
and  speakers  who,  assuming  to  reason  from  partial  and 
unverified  reports,  tell  us  dogmatically  that  their  particular 
conclusion  admits  of  no  dispute  ? 

So   far,  we   have   dealt  with   the    economic  aspect   of 

1  See  "Economic  and  Social  Factors  in  Chicago  Municipal  Lighting," 
by  John  R.  Commons,  in  "  Municipal  Affairs,"  Vol.  VI,  No.  1,  1002. 


MUNICIPAL  OWNERSHIP  207 

municipal  ownership  only.  But  there  are  other  phases  of 
the  question,  equally  important,  which  must  be  considered. 
These  may  be  grouped  under  the  general  head  of  the  re- 
lation of  municipal  ownership  to  municipal  government. 

One  of  the  questions  at  issue  is  whether  the  supply- 
ing of  public  utilities  is  a  proper  function  of  municipal 
government.  In  the  minds  of  those  who  lean  toward 
socialism  there  is,  of  course,  no  room  for  discussion  on 
this  question,  but  we  do  not  intend  to  consider  it  from 
that  point  of  view.  To  the  average  American  citizen 
the  question  is  whether,  under  our  Constitution  and  our 
republican  form  of  government,  municipalities  may  en- 
gage in  enterprises  which  are  recognized  everywhere 
as  a  species  of  commercial  business.  In  England  these 
enterprises  are  called  "municipal  trading,"  a  definition 
which  itself  indicates  that  they  are  considered  as  some- 
what differentiated  from  municipal  government. 

The  friends  of  municipal  ownership  contend  that  the 
legitimate  function  of  government  is  not  confined  to  the 
protection  of  the  citizen  in  his  rights,  and  to  the  furnish- 
ing of  police  power  for  the  suppression  of  wrongdoing, 
but  that  it  extends  to  everything  that  tends  to  promote 
the  well-being,  the  happiness,  and  the  prosperity  of  its 
citizens  in  general,  —  in  short,  that  it  may  do  all  those 
things  for  the  benefit  of  the  citizen  which  can  be  more 
conveniently  or  efficiently  done  through  the  medium  of 
government  than  through  private  effort.  Theoretically, 
the  discussion  of  this  branch  of  the  subject  belongs  to 
the  student  of  political  science  rather  than  to  the  lay- 
man. Practically,  it  cannot  be  denied  that  precedent 
and  practice  have  long  since  decided   that  the  function 


208  MUNICIPAL   PUBLIC   WORKS 

of  government  extends  beyond  the  narrow  limits  of  mere 
organization  and  police  protection.  In  fact  it  has  never, 
in  a  single  instance,  been  strictly  so  confined  in  American 
national,  state,  or  municipal  government.  The  carrying 
of  the  mails  and  the  regulation  of  commerce  between  the 
states  by  the  national  government ;  the  construction  and 
control  of  public  works  by  the  states  ;  the  regulation  of 
trade,  the  establishing  of  markets,  and  the  construction 
and  management  of  public  utilities  by  municipalities,  are 
all  examples  of  the  assumption  of  governmental  powers 
which  the  strict  application  of  the  narrow  view  of  govern- 
mental functions  advanced  by  the  opponents  of  municipal 
ownership  would  rigidly  exclude.  It  may  be  very  diffi- 
cult to  establish  the  line  where  governmental  control  shall 
end  and  private  effort  begin,  but  it  cannot  be  denied  that 
the  tendency  of  the  times  has  been  and  continues  to  be  in 
the  direction  of  paternal,  if  not  even  socialistic  control  in 
all  matters  where  it  is  clearly  demonstrated  that  the  in- 
terest of  the  citizen  and  the  public  at  large  can  be  better 
subserved  by  governmental  power  than  by  private  effort. 
Whether  this  is  or  is  not  an  unwise  or  dangerous  ten- 
dency, we  need  not  here  discuss.  The  distinction  is  not, 
however,  so  broad  and  clearly  defined  as  is  often  assumed. 
In  fact  the  functions  of  governmental  control  and  those 
of  commercial  independence  so  overlap  each  other  that  it 
is  difficult  to  define  the  limits  of  each.  It  is  clearly  the 
duty  of  the  government  to  protect  the  life  of  the  citizen 
when  threatened  by  his  fellow-citizen,  or  any  combination 
of  his  fellow-citizens.  If  the  threat  assumes  the  form  of 
the  sale  to  the  unsuspecting  citizen  of  impure  or  danger- 
ous food  or  water,  it  cannot  be  denied  that  the  govern- 


MUNICIPAL   OWNERSHIP  209 

ment  is  bound  to  interfere  to  the  extent  of  protecting  the 
life  of  the  citizen.  To  wliat  extent  the  government  may- 
go  in  furnishing  such  necessary  protection  is  not  a  matter 
for  discussion,  so  long  as  its  acts  contribute  to  that  protec- 
tion. It  may  go  to  the  extent  not  only  of  assuming  con- 
trol of  the  food  and  water  supply,  but,  if  deemed  necessary, 
of  supplying  these  articles  either  free  or  for  a  reasonable 
compensation.  If  the  water  supply  of  a  city  is  infected 
with  the  germs  of  typhoid  fever,  resulting  in  the  death 
of  hundreds  of  citizens,  and  if  private  enterprise  cannot 
be  induced  to  furnish  a  supply  of  pure  water,  it  is  but  a 
legitimate  step  further  in  the  reasoning  to  say  that  it  is 
the  duty  of  the  government  itself  to  furnish  the  necessity 
which  private  enterprise  refuses  to  supply,  and  to  collect 
a  tax  under  the  guise  of  water  rates  therefor.  Again, 
facilities  for  intellectual  training  are  in  one  sense  a  com- 
modity that  may  be  supplied  commercially  by  private  en- 
terprise. But  it  is  well  known  that  ignorance  and  crime 
go  hand  in  hand,  and  that  liberal  education  is  generally 
conducive  to  the  prevention  of  crime.  The  poor  are  not 
always  able  to  purchase  the  facilities  for  education,  and 
the  government  is  justified  as  a  legitimate  police  measure 
for  the  prevention  of  crime,  in  supplying  schools  and  en- 
forcing attendance  in  them.  The  practical  result  is  our 
magnificent  system  of  free  schools,  supported  by  the 
government.  And  while  it  is  true  that  the  prevention 
of  crime  is  probably  one  of  the  least  important  results 
achieved  by  them,  who  shall  say,  in  view  of  the  practical 
good  they  have  accomplished,  that  government  has  over- 
stepped its  legitimate  province  in  assuming  control  of  and 
supporting  them  ? 


210  MUNICIPAL   PUBLIC   WORKS 

This  reasoning  will  generally  apply  to  one  public 
utility  as  well  as  to  another.  Broadly  speaking,  the 
advocates  of  municipal  ownership  assert  that  govern- 
ment may  legitimately  engage  in  any  enterprise  intended 
for  the  public  good,  where  it  is  clearly  shown  that,  upon 
the  whole,  the  public  will  be  benefited  thereby.  The 
principle  seems  to  be  accepted  by  the  great  majority  of 
the  American  people,  and,  as  their  will  is  law,  it  is  prac- 
tically useless  to  attempt  to  controvert  or  oppose  it. 
The  question  is  therefore  practically  reduced  to  one  of 
utility,  economy,  and  expediency.  If  it  can  be  demon- 
strated that,  all  things  considered,  municipal  ownership 
will  result  in  benefit  to  the  public,  the  system  will  be 
adopted,  fine-spun  theories  of  government,  however 
plausible,  to  the  contrary  notwithstanding. 

It  is  argued  in  favor  of  municipal  ownership  that  it 
will  tend  to  decrease  dishonesty  and  jobbery  in  mu- 
nicipal government.  It  is  asserted  that  the  granting 
of  franchises  and  the  awarding  of  contracts  for  public 
utilities  offer  unusual  opportunities  and  temptations  for 
corrupting  the  members  of  city  government ;  that  these 
franchises  and  contracts  involve  vast  sums  of  money  and 
the  opportunity  for  enormous  profits,  and  that  unscrupu- 
lous corporations  are  willing  and  able  to  pay  large  sums 
to  secure  the  passage  of  ordinances  giving  them  a  mo- 
nopoly extending  often  over  a  long  period  of  years,  and 
which,  after  being  granted,  become  vested  rights  that 
cannot  be  abrogated.  It  is  popularly  believed  that  this 
kind  of  jobbery  and  corruption  is  very  common,  and  it 
must  be  admitted  that  the  belief  appears  to  be  supported 
by  strong  circumstantial  if  not  jDositive  evidence.     It  is 


MUNICIPAL  OWNERSHIP  211 

often  difficult  to  account  on  any  other  assumption  for  the 
action  of  city  councils  in  granting  franchises  clearly  op- 
posed to  the  public  interest.  It  is  asserted  by  the  advo- 
cates of  municipal  ownership  that  if  franchises  and  contracts 
for  public  work  and  public  utilities  were  not  offered  to  pri- 
vate persons  or  corporations,  the  occasion  and  opportunity 
for  such  jobbery  would  not  be  presented,  and  that  this 
species  of  corrupt  dealing  would  not  only  be  avoided,  but 
that  unjust  and  burdensome  contracts  would  not  be  saddled 
upon  the  innocent  public.  To  this  it  is  replied  that  the 
remedy  for  this  kind  of  crime  must  be  applied  at  the 
fountain  head,  by  excluding  from  public  office  men  who 
through  weakness  or  avarice  may  be  tempted  to  barter  the 
public  interest  for  private  gain.  Bribery  requires  the  ac- 
tive cooperation  of  two  parties,  and  if  one  of  them  is  in- 
corruptible it  cannot  be  consummated.  The  banker  who 
would  invite  or  permit  safe-breakers  to  sleep  in  his  bank, 
and  then  devote  his  energy  to  making  his  vaults  burglar- 
proof,  would  be  laughed  at  if  his  guests  outwitted  him 
and  got  his  money.  The  voter  who  helps  to  place  the 
keys  of  the  municipal  treasury  in  the  hands  of  dis- 
honest or  corruptible  men,  trusting  to  any  device  to 
prevent  stealing,  does  not  deserve  more  sympathy  than 
would  such  a  banker.  If  a  city  official  will  accept 
a  bribe  for  granting  a  franchise  for  a  public  utility, 
there  is  no  reason  to  expect  that  he  will  hesitate  to  rob 
the  city  in  the  construction  and  operation  of  a  plant 
to  supply  the  same  utility,  and  if  he  is  shrewd  and 
patient  he  may  get  more  out  of  it  in  that  way  than  the 
applicant  for  the  franchise  would  have  been  willing  to 
pay.     It  is  doubtless   true   that  he  can  be  more   readily 


212  MUNICIPAL   PUBLIC   WORKS 

detected,  convicted,  and  punished  in  the  one  case  than 
in  the  other,  but  experience  proves  that  he  will  hardly 
be  deterred  by  that  consideration.  Our  banking  institu- 
tions employ  the  most  perfect  devices  and  checks  to  detect 
embezzlement,  and  they  spare  no  pains  in  hunting  down 
and  punishing  offenders ;  but,  judging  from  the  number 
and  magnitude  of  bank  robberies  by  officers  and  em- 
ployees, such  means  are  not  very  effective  in  deterring  men 
from  such  crimes.  The  banker  will  tell  you  that  he 
relies  for  safety  more  upon  the  honesty  of  his  employees 
than  upon  his  ability  to  prevent  them  from  stealing,  if 
they  are  so  inclined.  But  safeguards  are  proper  and  nec- 
essary, and  to  the  extent  that  they  may  be  depended  upon 
it  is  asserted  that  they  can  be  applied  to  the  granting  of 
franchises  and  the  letting  of  contracts  as  well  as  to  the 
municipal  operation  of  works  to  supply  the  same  utilities. 

We  come  now  to  the  consideration  of  the  effect  of 
ownership  and  operation  of  public  utility  plants  by  the 
municipality  upon  the  municipal  government  itself.  It 
is  hoped  and  believed,  on  the  one  hand,  that  the  responsi- 
bilities incident  to  the  organization  and  management  of 
great  business  enterprises  will  tend,  not  only  to  quicken 
the  conscience  and  incite  the  patriotism  of  the  citizen, 
but  that  the  larger  responsibility  thus  thrown  upon 
him,  and  his  direct  interest  in  results,  will  increase  his 
sense  of  public  duty,  and  make  him  more  careful  of  his 
vote  in  selecting  public  officers,  and  will  thus  tend  to 
raise  civic  government  to  a  higher  plane. 

On  the  other  hand,  it  is  asserted  that  experience  does 
not  seem  to  support  these  hopeful  anticipations,  since 
there  is  no  apparent   evidence   that  greater  interest   is 


MUNICIPAL   OWNERSHIP  213 

taken  in  municipal  elections  in  those  cities  where  munici- 
pal ownership  exists;  and  the  fact  is  pointed  out  that 
elections  held  for  the  special  purpose  of  determining 
questions  relating  to  public  works  attract  little  inter- 
est and  draw  out  notably  small  votes. 

It  is  asserted  that  the  powerful  and  unscrupulous  cor- 
porations that  own  and  operate  the  public  utilities  of  our 
cities  do  not  hesitate  to  debauch  municipal  elections  in 
order  to  gain  their  selfish  ends ;  that  they  not  only  con- 
trol the  votes  of  their  many  employees,  but  that  they  buy 
the  votes  of  others  who  are  purchasable ;  that  they  secure 
the  active  cooperation  of  the  political  bosses  by  out- 
right bribery  or  by  "  swapping  "  influence ;  that  they  can 
afford  to  and  do  spend  large  sums  of  money  for  the 
purpose,  and  that  they  are  in  this  way  enabled  to  con- 
trol the  municipality  instead  of  being  controlled  by  it. 
There  seem  to  be  substantial  grounds  for  these  accusa- 
tions in  many  cases,  though  they  are  not  often  proved. 
It  is  claimed  that  municipal  ownership,  by  abolishing 
these  corporations,  would  remove  the  source  of  such 
temptation  and  corruption,  and  that  it  would  thus  be  a 
potent  influence  in  preserving  the  purity  of  municipal 
elections.  On  the  other  hand,  it  is  asserted  that  the  very 
large  increase  in  the  number  of  municipal  employees  that 
must  result  from  municipal  ownership  would  be  a  power- 
ful stimulus  to  the  "spoils"  system,  and  would  place  a 
dangerous  power  in  the  hands  of  the  political  bosses 
and  manipulators  of  elections,  by  which  they  would  be 
able  to  perpetuate  their  power  and  influence ;  and  that 
these  political  bosses  do  not  themselves  hesitate  to  use 
money  or  its  equivalent  to  carry  elections  in  their  favor. 


214  MUNICIPAL  PUBLIC  WORKS 

It  is  a  well-known  fact  that  as  a  rule  city  employees  feel 
that  it  is  necessary  for  them  to  vote  with  that  party  or  for 
those  persons  to  whom  they  are  indebted  for  appoint- 
ment to  positions  or  for  continuance  therein.  Experi- 
ence teaches  them  that  any  other  course  is  likely  to 
result  to  their  serious  disadvantage.  The  increasing 
very  largely  of  this  class  of  subservient  voters  cannot 
therefore  be  otherwise  than  dangerous  to  the  interests 
of  good  government.  It  is  claimed,  however,  that  this 
tendency  can  be  effectually  restrained  in  a  number  of 
ways.  First  among  these  may  be  mentioned  an  efficient 
system  of  civil  service,  which  will  remove  employees 
from  political  influence.  Granting  that  this  remedy 
would  prove  effective,  it  is  not  at  all  certain  that  civil 
service  regulations  that  are  sufficiently  drastic  to  exclude 
political  influence  will  prove  wholly  beneficial  to  munici- 
pal operation  of  utilities.  There  can  be  no  doubt  that 
one  of  the  most  important  conditions  for  the  successful 
management  of  business  enterprises  is  the  undivided 
authority  and  absolute  control  of  all  subordinates  by 
the  management.  If  an  employee,  whether  a  clerk  or 
a  laborer,  is  not  efficient  or  reliable,  he  must  be  dealt 
with  properly  and  summarily.  If  the  employee  feels 
that  his  superior  has  full  power  so  to  deal  with  him, 
he  will  stand  in  wholesome  awe  of  that  power  and  its 
consequence.  If,  on  the  other  hand,  he  feels  that,  at 
best,  his  superior  has  no  direct  power  of  discipline  or 
removal,  but  must  act  in  accordance  with  certain  rules 
and  through  certain  agencies,  must  prefer  charges  and 
prove  them,  he  will  feel  sure  of  delay  and  hopeful  of 
palliation.     One  may  be  so  morally  certain  of  the  dere- 


MUNICIPAL  OWNERSHIP  215 

liction  of  an  employee  as  to  be  justified  in  dismissing 
him,  but  quite  unable  to  prove  the  dereliction  and  con- 
vict him  in  a  legal  manner.  Private  corporations  secure 
the  best  results  by  holding  each  employee  accountable 
for  his  fidelity  and  efficiency  to  a  superior  who  has 
absolute  power  of  action.  Such  administration  is  not 
inconsistent  with  justice,  and  may  follow  the  essential 
principles  of  civil  service,  but  to  hamper  and  bind  an 
executive  by  inflexible  rules,  and  divided  authority,  can- 
not be  otherwise  than  destructive  of  sound  business  disci- 
pline. Whatever  merit  the  civil  service  system  may 
have,  as  applied  to  officials  and  to  clerical  employees, 
there  is  room  for  serious  doubt  whether  its  rigid  appli- 
cation to  business  enterprises  would  produce  the  most 
satisfactory  results. 

Another  method  by  which  it  is  claimed  that  political 
manipulation  of  employees  may  be  avoided,  and  the  purity 
of  elections  safeguarded,  is  that  of  placing  the  manage- 
ment of  business  enterprises  owned  by  the  municipality 
under  the  more  or  less  permanent  control  of  a  single  per- 
son, or  a  commission  composed  of  men  of  high  character, 
appointed  independently  of  political  considerations,  who 
would  have  an  eye  single  to  attaining  the  best  possible 
results,  and  would  resolutely  oppose  the  introduction  of 
political  methods  into  the  public  business.  Such  a  con- 
dition of  affairs  is  sometimes  attained,  but  not  as  a  rule. 
The  best  citizens  are  interested  in  politics,  as  they  should 
be,  and  there  is  no  distinct  line  which  separates  what  the 
good  citizen  may  do  for  the  advancement  of  a  party  whose 
success  he  believes  to  be  essential  to  the  best  interests  of 
the  community,  from  what  he  should  not  do.     He  cannot 


216  MUNICIPAL   PUBLIC   WORKS 

be  neutral,  and  he  cannot  hide  his  political  light  under  a 
bushel.  Many  of  his  employees  will  be  influenced  in  cast- 
ing their  votes  by  his  example,  even  if  he  refrains  from 
precept.  He  may  be  honest  in  his  convictions,  and  may 
intend  that  his  influence  shall  be  entirely  in  the  direction 
of  the  best  interests  of  the  community;  but,  like  other 
men,  he  may  be  mistaken  in  his  judgment.  That  an 
official  occupying  such  a  position  has  political  influence 
is  sufficiently  proved  by  the  fact  that  every  politician  is 
always  anxious  to  have  these  positions  filled  by  men  from 
his  own  party.  The  attempt  to  counteract  such  influence 
by  the  appointment  of  boards  in  which  each  political 
party  is  equally  represented  has  not  generally  proved  a 
success.  It  must  be  admitted  that  the  so-called  bipartisan 
boards  have  usually  failed  to  meet  the  expectations  of 
the  friends  of  good  municipal  government.  Judging 
from  experience,  it  seems  impracticable,  if  not  impossi- 
ble, to  keep  politics,  for  any  considerable  period,  out  of 
municipal  business  enterprises.  At  the  same  time  it  must 
be  recognized  that  it  is  only  when  municipal  employees 
fall  under  the  control  of  unworthy  and  unscrupulous  poli- 
ticians and  bosses  that  any  serious  harm  results.  In  the 
present  unsatisfactory  condition  of  so  many  of  our  munici- 
pal governments,  when  the  rule  of  bosses  and  rings  is  so 
common,  and  "  boodle  "  and  corruption  are  so  frequently 
to  be  expected,  it  is  certainly  desirable  to  curb  as  much  as 
possible  the  power  of  these  bosses  and  rings  to  do  harm, 
and  to  prevent  the  perpetuation  of  their  control.  Under 
such  conditions  the  army  of  city  employees  that  would  be 
necessary  if  a  city  owned  and  operated  all  its  public  utili- 
ties would  constitute  a  body  of  voters  that,  under  the  con- 


MUNICIPAL  OWNERSHIP  217 

trol  of  unscruinilous  leaders,  might  well  be  regarded  as 
dangerous. 

We  have,  it  will  be  noted,  discussed  the  subject  of  mu- 
nicipal ownership  in  a  general  way.  It  may  often  occur 
that  special  conditions  will  dictate  the  advisability  and 
wisdom  of  a  city's  undertaking  the  construction  and 
operation  of  some  particular  public  work,  and  the  reasons 
for  doing  so  may  be  of  such  weight  as  to  sweep  aside  all 
general  arguments.  It  may  be  true,  also,  that  works  to 
supply  some  one  class  of  public  utilities  are,  for  various 
reasons,  more  appropriate  for  municipal  management  than 
others,  and  may  call  more  urgently  for  the  direct  and  ex- 
clusive control  of  the  municipality.  Thus,  a  supply  of 
pure  and  wholesome  water  is  of  such  great  importance  to 
the  health  and  life  of  the  people,  and  to  maintain  it 
requires  often  such  prompt  application  of  remedial  meas- 
ures, that  there  may  be  ample  justification  for  the  munici- 
pality owning  and  controlling  that  supply,  regardless  of 
economic  or  other  considerations. 

In  conclusion,  it  will  be  found,  after  full  considera- 
tion of  all  the  arguments  pro  and  con  and  of  all  the  facts 
available  at  present,  that  we  are  not  yet  ready  to  decide 
the  main  question  finally.  We  certainly  need  further 
accurate  data  as  to  the  actual  relative  cost  of  public  ser- 
vice under  the  management  of  private  corporations,  and 
under  municipal  ofiicials,  and  further  observations  as  to 
the  effect  of  municipal  ownership  upon  civic  politics. 
We  need,  further,  to  know  whether  it  is  not  possible 
and  practicable  to  license  and  regulate  the  supply  of 
public  utilities  through  private  corporations  in  such  a 
manner   as  to  obviate  the  evils  now,  with  good  reason, 


218  MUNICIPAL   PUBLIC   WORKS 

complained  of,  and  at  the  same  time  secure  in  a  large 
measure  the  benefits  expected  through  municipal  owner- 
ship, without  assuming  the  responsibilities  and  incurring 
the  dangers  such  ownership  involves. 

It  would  seem,  therefore,  the  wisest  course  to  proceed 
in  the  direction  of  municipal  ownership  very  cautiously 
and  conservatively  for  the  present.  The  serious  and 
costly  blunders  that  are  so  likely  to  accompany  imperfect 
knowledge  and  a  stage  of  experimentation  may  thus  be 
avoided. 


CHAPTER  XV 
QUASI-PUBLIC    CORPORATIONS    AND    THEIR    CONTROL 

In  the  preceding  chapter  we  considered  some  of  the 
facts  and  arguments  for  and  against  municipal  ownership 
of  public  utility  enterprises.  While  no  definite  conclu- 
sion was  arrived  at,  there  seemed  to  be  sufficient  reason 
for  advising  that  no  hasty  action  be  taken,  but  rather  that 
great  caution  should  be  exercised  and  safe  conservatism 
adhered  to  until  we  shall  have  more  experience  and  light 
upon  the  whole  subject. 

A  reexamination  of  the  question  of  securing  these 
public  utilities  through  contracts  with  private  corpora- 
tions was  suggested,  with  the  view  of  determining  whether 
this  may  not  be  accomplished  in  such  a  way  as  to  avoid 
most  of  the  objectionable  features  and  all  the  abuses  now 
so  common,  and  thus  relieve  the  municipality  of  the  finan- 
cial burdens,  responsibilities,  and  dangers  of  municipal 
ownership. 

The  question  of  controlling  these  semi-public  corpora- 
tions has  been  widely  discussed,  though  not  always  in  a 
scientific  spirit  or  from  a  purely  economic  standpoint. 
We  may  not  expect  to  say  much  that  is  new  upon  the 
subject,  but  it  may  be  well  to  review  the  present  situation, 
and  call  attention  to  what  may,  as  the  writer  conceives, 
offer  a  practical  solution  of  the  problems  involved. 

The  term  quasi-public  corporations  is  now  commonly 

219 


220  MUNICIPAL   PUBLIC   WORKS 

used  to  designate  those  privately  organized  corporations 
that  undertake  to  supply  the  public  needs  of  the  people 
of  a  city,  under  franchises  or  contracts  granted  by  the 
municipal  corporation  and  subject  more  or  less  to  its  con- 
trol and  regulation.  The  term  is  not  a  very  happy  one, 
but  so  long  as  we  understand  what  it  means,  it  answers  the 
purpose  sufficiently  well. 

These  quasi-public  corporations  are,  like  most  private 
enterprises,  organized  for  purely  business  purposes,  and 
their  object  is  profit.  Their  aim  is  to  secure  the  largest 
possible  returns  from  the  capital,  skill,  and  labor  invested. 
This  aim  is  certainly  justifiable,  and  is  even  laudable  in  so 
far  as  it  works  no  injustice  to  others.  No  one  would  for 
a  moment  contend  that  they  are  not  entitled  to  a  reason- 
able return  upon  their  capital  and  labor,  and  the  only 
contention  is  as  to  what  constitutes  a  reasonable  return. 
One  of  the  elements  that  must  be  considered  in  dealing 
with  the  question  is  that  of  risk  or  contingency.  A 
capitalist  may  be  quite  willing  to  invest  his  money  in 
United  States  bonds  which  yield  but  S^  per  cent 
profit,  while  he  will  not  invest  in  a  business  enter- 
prise involving  risk,  that  does  not  promise  a  much 
higher  rate  of  profit,  because  in  the  one  case  he  has  entire 
confidence  that  the  interest  will  be  paid  and  the  principal 
returned,  while  in  the  other  he  recognizes  that  he  may  not 
only  receive  no  profit,  but  may  lose  a  part  or  the  whole  of 
the  principal. 

But  quasi-public  corporations  differ  from  ordinary  pri- 
vate corporations  in  one  very  important  respect.  The 
purely  private  corporation  relics  wholly  upon  its  own 
resources,  and  is  independent  in  its  business  operations. 


QUASI-PUBLIC  CORPORATIONS  221 

and  the  amount  of  profit  it  may  fairly  make  (so  long  as  it 
keeps  within  the  bounds  of  law  and  equity)  is  limited  only 
by  the  prices  it  can  command  for  its  products  in  the  market; 
and  if  it  controls  the  market  through  monopoly,  it  may 
realize  prices  and  make  profits  that  would  otherwise  be 
impossible.  The  quasi-public  corporation,  on  the  contrary, 
operates  under  a  contract,  called  a  franchise,  with  a  mu- 
nicipal corporation,  which  confers  upon  the  private  cor- 
poration certain  rights  and  privileges.  Whether  this 
franchise  is  conferred  by  state  statutes  or  by  municipal 
authority  does  not  matter.  Theoretically,  at  least,  the 
franchise  is  an  agreement  between  the  two  contracting 
parties  for  their  mutual  benefit.  Each  may  be  said  to 
contribute  to  the  joint  capital  of  the  enterprise.  The 
private  corporation  contributes  the  money,  while  the 
municipal  corporation  contributes  and  guarantees  rights 
and  privileges  which  enhance  its  prospects  of  success,  and 
without  which  it  could  not  operate  at  all.  These  rights 
and  privileges  are  therefore  as  truly  valuable  assets  of  the 
private  corporation  as  is  its  money  capital. 

To  all  intents  and  purposes  the  municipal  corporation 
is  a  special  partner  of  the  private  corporation,  and  is 
entitled  to  an  equitable  division  of  the  profits  accruing. 
This  view  has  a  rational  foundation  in  reason  and  equity, 
whether  or  not  it  be  sound  in  law. 

The  contribution  of  the  municipal  corporation  —  the 
franchise  —  which  usually  excludes  competition,  is  not 
infrequently  the  most  valuable  asset  of  the  private 
corporation.  It  makes  the  investment  of  money  in 
the  enterprise  less  hazardous,  and  therefore  more  attrac- 
tive to  capital,  and   often  enables  the  investor  to  realize 


222  MUNICIPAL  PUBLIC  WORKS 

large  profits.  But  as  these  franchises  have  been  usually 
framed,  they  do  not  provide  for  an  equitable  division  of 
the  profits  between  the  two  parties  in  interest,  and  the 
municipal  corporation  receives  no  proper  consideration  for 
its  contribution  to  the  joint  capital.  Dissatisfaction  on 
the  part  of  the  citizens  of  the  municipality  naturally  re- 
sults. These  citizens  feel  and  insist  that  as  the  mu- 
nicipality is  practically  a  partner  in  the  enterprise,  it  is, 
therefore,  entitled  to  a  fair  division  of  the  profits.  The 
demand  may  be  for  better  and  cheaper  service,  rather  than 
for  a  money  consideration,  but  it  amounts  to  the  same 
thing.  The  private  corporation  does  not  admit  the 
partnership  relation,  holding  rather  that  the  relation  is 
contractual  alone,  and,  having  performed  its  part  of  the 
contract,  it  is  under  no  obligation  to  do  more.  And  it 
usually  exacts  the  pound  of  flesh.  Under  too  many  fran- 
chises its  position  is,  too,  impregnable,  and  the  obvious 
injustice  must  be  borne  by  the  helpless  municipality  and 
its  citizens.  Palpable  injustice,  however  strongly  it  may 
be  entrenched  behind  the  law,  is  never  submitted  to  pa- 
tiently, and  there  springs  up  between  the  two  interests  a 
condition  of  antagonism  which  grows  with  what  it  feeds 
upon,  until  the  breach  becomes  too  wide  to  admit  of 
reasonable  adjustment  from  either  side. 

If  we  examine  into  such  cases,  we  shall  generally  find 
that  the  trouble  is  not  inherent  in  the  system,  but  is  trace- 
able to  the  imperfect  and  unfair  provisions  of  the  original 
franchises.  These  were  generally  devised  and  entered 
into  at  a  time  when  the  city  was  much  smaller  and  when 
the  importance  of  the  rights  given  to  the  private  corpora- 
tion were  not  and  perliaps  could  not  be  foreseen  or  appre- 


QUASI-PUBLIC   CORPORATIONS  223 

ciated.  The  importance  of  obtaining  service  urgently 
needed  may  have  seemed  of  greater  weight  than  the  terms 
upon  which  it  was  secured.  The  documents  were  hastily 
drawn,  often  by  incompetent  lawyers,  and  passed  without 
proper  consideration  on  the  part  of  the  city ;  not  infre- 
quently the  projectors,  usually  shrewd  business  men 
looking  after  their  own  interests  alone,  and  having  an  eye 
to  the  future  rather  than  to  the  present,  themselves  framed 
the  papers,  aided  by  the  best  legal  talent,  and  embodied 
in  them  innocent-looking  clauses  that  contained  the  germs 
from  which  serious  trouble  for  the  municipality  would 
later  develop.  The  result  has  been  that  the  interests  of 
the  municipality  have  not  been  covered  or  safeguarded 
and,  too  late,  it  finds  itself  completely  in  the  power 
of  a  rapacious  corporation  with  vested  rights,  and  often 
with  perpetual  life. 

Whatever  may  be  the  legal  interpretation  of  quasi-public 
franchises,  the  only  true  theory  of  them  is  that  they  are, 
or  should  be,  a  compact  for  the  mutual  benefit  of  the  two 
parties  entering  into  them  ;  and,  in  accordance  with  this 
theory,  the  only  rational  and  satisfactory  policy  for  each 
party  to  pursue  is  one  of  mutual  justice  and  fair  dealing, 
in  the  promotion  of  which  one  party  is  under  the  same 
obligation  as  the  other. 

The  essential  foundation  of  such  a  policy  of  justice  and 
fair  dealing  must  be  a  reasonable  and  equitable  compact 
between  the  parties,  and  consequently  the  framing  of  the 
original  franchise  is  a  matter  of  the  greatest  importance. 
The  ordinary  city  council  should  not  be  wholly  intrusted 
with  this  important  duty.  As  a  rule,  its  members  are  not 
fitted  either  by  natural  ability,  acquirements,  or  previous 


224  MUNICIPAL  PUBLIC  WORKS 

experience  for  a  duty  requiring,  in  the  highest  degree, 
economic  knowledge,  legal  acumen,  and  business  sagacity. 

The  general  provisions  of  these  quasi-public  franchises 
are  a  fit  subject  for  the  deliberative  wisdom  of  tlie  state 
legislature,  particularly  since  uniformity  in  the  terms  of 
such  franchises  throughout  the  state  is  desirable  for  many 
reasons,  some  of  which  will  be  referred  to  hereafter.  The 
adoption  of  a  wise  general  law  covering  the  granting  of 
franchises,  and  the  making  of  contracts  for  supplying 
public  utilities,  would  undoubtedly  be  the  most  effective 
preventive  of  the  careless,  unwise,  and  unjust  municipal 
franchises  that  are  now  so  common  in  our  American 
cities. 

The  subject  of  such  general  state  legislation  will  be 
taken  up  more  in  detail  later  on  in  this  chapter,  after 
some  of  the  underlying  principles  that  should  be  kept  in 
mind  in  any  legislation  dealing  with  the  subject  have 
been  briefly  discussed. 

First:  The  fundamental  principle  that  should  govern 
in  granting  franchises  to  and  regulating  the  operations  of 
quasi-public  corporations,  whether  under  state  enactment 
or  under  municipal  legislation,  should  be  that  of  mutual 
duties  and  mutual  compensations.  To  be  more  specific, 
the  private  corporation  should  receive  a  fair,  and  even 
liberal,  reward  for  its  expenditure  of  capital  and  skill ;  the 
municipality  should  receive  efficient  and  adequate  service 
upon  reasonable  terms ;  and  when  these  conditions  are  sat- 
isfied, any  surplus  revenues  should  be  equitably  divided 
between  the  two. 

The  business  relations  that  must  exist  between  a  munici- 
pality and  a  corporation  lurnislung  public  service  are  ueces- 


QUASI-PUBLIC  CORPORATIOIS^S  225 

sarily  of  siicli  an  intimate  character,  and  extend  over  so 
long  a  period,  that  it  is  in  every  way  desirable  and  impor- 
tant that  the  two  should  work  together  with  a  reasonable 
degree  of  harmony.  The  spirit  of  antagonism  that  so 
often  exists  (both  in  the  inception  and  operation  of  quasi- 
public  corporations)  cannot  be  otherwise  than  incompat- 
ible with  the  public  interests.  As  well  might  two  partners 
expect  to  prosper  in  business  when  each  enters  the  firm 
with  the  deliberate  purpose  of  taking  advantage  of  the 
other,  and  follows  up  such  a  beginning  with  constant 
enmity  and  controversy.  To  speak  of  the  possibility  of  a 
relation  comparable  to  partnership  between  a  municipality 
and  a  corporation  supplying  public  service  is  likely  to 
provoke  a  smile  of  derision  among  those  familiar  with  the 
present  condition  of  things,  and  it  is,  of  course,  too  broad 
a  term  to  express  correctly  the  true  relation  that  one 
should  bear  to  the  other ;  but  it  conveys  more  nearly  a 
correct  conception  of  the  ideal  relation  than  does  the  idea 
of  two  rival  business  firms,  each  striving  to  obtain  undue 
advantage  over  the  other.  If  the  problem  of  the  satisfac- 
tory working  together  of  municipalities  and  quasi-public 
corporations  is  ever  worked  out,  the  solution  will  be  found 
along  lines  of  mutual  justice  and  benefit. 

Second:  The  fact  should  be  recognized  that  capital 
invested  in  plant  to  supply  public  utilities  in  cities  is,  to 
a  large  degree,  protected  from  those  uncertainties  and 
hazards  that  attend  ventures  in  ordinary  industrial  en- 
terprises. Such  investments  should  not,  therefore,  be 
regarded  as  speculative  in  character,  since  a  reasonable  and 
regular  return  can  nearly  always  be  depended  upon  ;  and, 
indeed,  a  minimum  rate  of  dividend  or  interest  might  be 

Q 


226  MUNICIPAL   PUBLIC   WORKS 

safely  guaranteed  by  the  municipality  under  such  prudent 
and  reasonable  conditions  as  will  hereafter  be  outlined. 
Rates  for  service  might  be  permitted  and  authorized  that 
will  assure  such  a  minimum  interest  or  dividend,  so  that 
the  capital  would  be  almost  as  safely  invested  as  in  gov- 
ernment or  municipal  bonds.  It  would  then  be  proper 
and  justifiable  to  fix  maximum  rates  which  would  limit  to 
a  definite  percentage  the  dividends  that  might  be  paid 
upon  the  capital  actually  invested.  Under  such  condi- 
tions the  certainty  of  fair  returns  and  the  possibility  of 
liberal  maximum  dividends  would  be  sufficient  to  make 
the  investment  attractive  to  conservative  capitalists. 

Provisions  of  this  character  would,  of  course,  involve 
such  regulation  of  the  private  corporation  as  would  pre- 
vent the  inflation  of  its  capital  by  methods  commonly 
known  as  "stock  watering."  They  would  involve  also 
some  method  of  ascertaining  the  actual  earnings  of  the 
private  corporation.  Both  these,  it  is  admitted,  have 
been  the  most  difficult  matters  to  deal  with  in  the  whole 
range  of  the  controversy  with  quasi-public  corporations, 
but  it  does  not  follow  that  their  adjustment  is  impossible. 
We  shall  consider  later  on  some  of  the  methods  that  seem 
to  promise  such  a  solution. 

Third :  The  term  of  years  over  which  a  franchise  should 
extend  has  been  widely  discussed,  and  there  exists  much 
difference  of  opinion  on  the  subject.  The  preponderance 
of  opinion  seems  to  be  in  favor  of  a  definite  period  of 
years,  but  no  general  agreement  exists  as  to  the  proper 
length  of  the  period.  Looking  at  the  matter  from  the 
standpoint  of  the  municipality  alone,  it  seems  desirable 
to  make  the  period  as  short  as  possible.     Our  American 


QUASI-PUBLIC   CORPORATIONS  227 

cities  are  growing  so  rapidly,  and  the  conditions  change 
so  quickly,  that  it  seems  inadvisable  to  bind  up  public 
business  in  inflexible  contracts  for  any  considerable  length 
of  time.  On  the  other  hand,  the  projectors  say  with 
good  reason  that  it  is  impossible  to  obtain  capital  for  the 
construction  and  operation  of  such  public  works  at  rea- 
sonable rates  of  interest,  if  at  all,  for  short  franchise 
periods  ;  that  such  works  are  as  a  rule  designed  with  a 
view  to  future  rather  than  to  present  profits ;  that  often 
many  years  are  required  for  the  development  of  an  enter- 
prise into  a  profitable  condition  ;  that  the  plant  employed 
has  an  average  term  of  natural  life  and  usefulness,  and 
that  if  it  must  be  disposed  of  before  it  has  reached  the  end 
of  that  term  there  may  result  a  material  loss.  This  last 
point  seems  to  be  not  well  taken,  since  the  plant  must  in 
any  event  be  maintained  in  efficient  condition  until  the  end 
of  the  period,  and  in  every  large  plant  some  parts  will  have 
been  worn  out  and  be  in  need  of  renewal  long  before  others. 

On  the  other  hand,  it  is  argued  that  franchises  should 
be  revocable  for  sufficient  reason  at  any  time,  provided  the 
owner  be  fairly  compensated. 

This  view  is  attractive  in  theory,  but  practical  difficul- 
ties arise  when  we  attempt  to  arrive  at  a  fair  compensa- 
tion. It  is  very  difficult  to  place  a  price  upon  a  plant 
that  has  been  in  use  for  a  period  of  years  but  is  yet  in 
good  condition,  since  its  real  value  to  the  owner  and  to 
the  prospective  purchaser  may  be  very  different.  It  may 
be  capable  of  performing  good  service  for  so  long  a  time 
in  the  future  as  to  be  almost  as  good  as  new  to  the  owner, 
while  to  the  purchaser  it  may  be  worth  only  what  it  will 
bring  in  the  market  as  second-hand  machinery. 


228  MUNICIPAL  PUBLIC   WORKS 

It  stands  to  the  owner  as  so  much  money  invested,  and 
possibly  capable  of  earning  enough  during  its  further 
life  to  repay  the  original  cost  and  afford  a  good  profit. 
It  would  not  be  fair  to  him  to  take  it  at  its  market  value 
and  cut  off  this  source  of  possible  profit.  Nor  is  it  fair 
and  right  to  revoke  a  franchise  at  a  time  when,  after  years 
of  unproductive  operation,  conditions  have  improved  so  as 
to  promise  a  good  profit  in  the  future,  unless  the  owner  is 
compensated  accordingly. 

Where,  however,  a  franchise  has  been  granted  upon 
terms  that  contemplate,  and  will,  to  some  extent,  accom- 
modate themselves  to  changing  conditions,  there  should 
arise  no  urgent  necessity  for  terminating  it  abruptly  or 
within  a  very  short  period. 

Still  another  not  inconsiderable  class  believe  that  such 
franchises  should  be  either  perpetual  or  for  so  long  a 
term  as  to  be  equivalent  to  perpetuity,  with  provisions 
for  readjusting  the  terms  as  frequently  as  may  be  found 
necessary.  While  the  investor  would  usually  very  much 
prefer  a  perpetual  franchise  with  fixed  terms,  or  with 
provision  for  modifying  those  terms  upon  some  equita- 
ble basis,  he  must  necessarily  oppose  one  which  allows 
the  terms  to  be  changed  at  the  will  of  the  municipality, 
without  his  consent,  since  this  would  introduce  an  ele- 
ment of  uncertainty  and  instability  in  the  whole  enter- 
prise that  would  repel  capital. 

Upon  the  whole,  it  would  seem  that  a  franchise  for  a 
definite  period  of  years  with  a  fair  provision  for  taking 
over  the  plant  by  the  municipality  at  the  end  of  the 
period  is  most  advantageous  to  both  parties,  and  that 
a  period  of  from  twenty  to  tliirty  years  is  perhaps,  all 


QUASI-PUBLIC   CORPORATIONS  229 

things  considered,  most  appropriate.  Whatever  be  the 
period  (unless  perpetual),  it  is  very  important  that  the 
manner  in  which  the  franchise  shall  be  terminated,  and 
the  disposition  that  shall  then  be  made  of  the  property 
of  the  private  corporation,  shall  be  so  definitely  and 
clearly  provided  for  that  no  misunderstanding  can  arise 
when  the  end  of  the  period  arrives.  It  is  quite  common, 
and  may  be  entirely  proper,  to  stipulate  that  the  franchise 
shall  expire  absolutely  without  notice  or  other  action  on 
the  part  of  either  party  upon  the  date  named,  and  that 
the  plant  of  the  private  corporation  shall  thereupon 
become  the  property  of  the  municipality  without  any 
compensation  whatever.  There  are,  however,  some  prac- 
tical objections  to  this  course  ;  for  instance,  the  private 
corporation,  knowing  that  its  plant  will  revert  to  the 
municipality,  may  allow  it  so  greatly  to  deteriorate  dur- 
ing the  last  few  years  of  the  period  that  the  service 
may  be  crippled  or  inefficient.  It  would  seem  better 
to  provide  that  the  plant  and  property  should  be  taken 
over  by  the  municipality  at  a  fair  price,  to  be  ascertained 
at  the  time.  Where  this  is  to  be  done,  the  method 
of  determining  the  amount  of  compensation  should  be 
clearly  and  definitely  stipulated.  When  such  a  transfer 
of  property  is  made  at  the  expiration  of  the  franchise, 
there  can,  of  course,  be  no  claim  for  compensation  for 
franchise  rights  or  "  good  will,"  though  this  may  be  an 
element  of  great  importance  where  the  plant  is  taken 
over  before  the  expiration  of  the  franchise.  It  should 
be  distinctly  stated  whether  the  property  is  to  be  ap- 
praised at  its  original  cost ;  or  at  the  cost  of  duplicating 
it  at  the  time  ;  or  as  a  "  going  concern,"  in  which  case  its 


230  MUNICIPAL   PUBLIC   WORKS 

value  for  further  service  m  situ  must  be  considered  ;  or 
whether  it  shall  be  valued  at  what  it  may  be  worth  in 
the  market  at  the  time ;  and  the  manner  in  which 
its  value,  in  any  case,  shall  be  arrived  at.  Generally,  the 
most  satisfactory  plan  is  to  appoint  appraisers  or  arbitra- 
tors in  the  usual  way  to  determine  its  value.  In  those 
cases  where  the  municipality  reserves  the  right  to  revoke 
the  franchise  at  any  time  and  take  over  the  property,  the 
principles  upon  which  the  value  of  the  franchise  and 
the  good  will  of  the  business  shall  be  determined  should 
be  distinctly  stipulated. 

Fourth:  The  question  of  fair  and  reasonable  rates  to 
be  charged  for  public  service  is  not  only  a  most  impor- 
tant one,  but  it  is  the  most  fruitful  source  of  controversy 
between  quasi-public  corporations  and  municipalities. 
The  question  of  efficiency  and  quality  of  service  given 
is  so  closely  connected  with,  if  not  involved  in,  that  of 
rates,  that  they  can  be  best  considered  together.  As 
a  general  proposition  it  may  be  stated  that  a  fair  rate 
for  any  service  is  cost  and  a  reasonable  profit.  No  quasi- 
public  corporation  should  extort  more  and  no  munici- 
pality should  demand  less.  Under  the  present  conditions 
the  actual  cost  may  be  known  to  the  private  corporation, 
but  it  is  seldom  made  public  and  is,  therefore,  unknown 
to  the  municipality  and  its  citizens,  by  whom  it  is  doubt- 
less generally  underestimated,  and  people  having  their 
own  interests  in  view  are  disposed  to  believe  that  rates 
are  unnecessarily  and  unreasonably  high.  It  is  very 
difficult  to  determine  in  advance  with  close  approxima- 
tion what  a  given  service  will  cost,  and  it  is  still  more 
difficult  to  know  whether  rates  that  are  proper  now  will 


QUASI-PUBLIC   CORPORATIONS  231 

continue  to  be  so  in  the  future.  Not  only  may  the  ele- 
ments of  cost  change,  but  the  character  of  the  service 
demanded  and  rendered  may  vary  within  quite  wide 
limits.  In  the  early  years  of  the  franchise  the  business 
is  likely  to  be  less  remunerative  than  later,  and  rates 
which  then  seem  reasonable  may  become  exorbitant  when 
the  volume  of  business  has  greatly  expanded  and  im- 
proved methods  and  machinery  have  been  introduced, 
and  consequently  there  is  very  frequently  good  ground 
for  complaint  and  dissatisfaction  with  existing  rates  in 
large  cities.  It  is,  therefore,  desirable  and  important 
that  rates  should  not  remain  unalterably  fixed  through- 
out the  whole  life  of  the  franchise,  but  should  be  subject 
to  readjustment  from  time  to  time  in  order  that  they 
may  be  accommodated  to  changed  conditions.  There 
should  be  the  same  flexibility  with  reference  to  the 
quality  of  the  service  rendered.  Both  may  adjust  them- 
selves where  the  corporation  supplying  the  service  is 
left  entirely  free  from  municipal  regulation,  since  the, 
lowering  of  a  rate  or  the  improving  of  a  service  may 
increase  net  earnings,  and  therefore  be  profitable  ;  but  in 
a  matter  of  so  much  importance  the  municipality  should 
have  something  to  say,  and  there  should  be  some  accepted 
method  of  adjusting  rates,  earnings,  and  profits  when 
conditions  make  changes  desirable.  If  rates  were  fixed 
upon  the  basis  of  cost  and  a  percentage  of  profit  varying 
between  a  minimum  and  a  maximum,  it  would  then  be 
practicable  to  vary  these  rates  from  time  to  time  without 
doing  injustice  to  any  one.  There  is,  in  fact,  no  other 
basis  upon  which  they  can  rationally  be  determined.  To 
provide  that  they  shall  not  exceed  the  rates  charged  in 


232  MUNICIPAL  PUBLIC   WORKS 

other  cities  is  simply  to  adopt  standards  that  are  them- 
selves purely  empirical,  and,  besides,  that  which  is  a  fair 
rate  in  one  city  may  not  be  in  another,  because  of  differ- 
ing conditions  ;  to  say  that  they  shall  not  exceed  certain 
figures  is  merely  to  fix  a  limit  in  one  direction,  which 
may  be  wide  of  reasonableness  ;  and  to  name  them  at 
random,  or  at  the  dictation  of  the  interested  corporation, 
is  to  set  correct  business  principles  at  defiance.  The 
only  objection  that  can  be  raised  to  the  method  of  basing 
rates  on  cost  and  a  fair  profit  is  the  difficulty  or  assumed 
impossibility  of  ascertaining  the  true  cost,  but  this  is  a 
difficulty  that  it  should  be  not  only  possible  but  quite 
practicable  to  overcome. 

It  is  assumed  by  many  that  service  should  be  supplied 
to  the  citizens  at  exact  cost  to  the  municipality  ;  in  other 
words,  that  the  municipality  is  not  entitled  to  any  revenue 
therefrom,  to  help  bear  the  general  burdens  of  the  govern- 
ment. There  seems  no  just  ground  for  such  an  assump- 
tion so  long  as  the  principle  of  equal  taxation  is  not 
infringed.  It  may  therefore  be  not  only  entirely  just,  but 
good  policy  so  to  arrange  rates  for  public  service  that  there 
shall  be  a  margin  of  profit  to  the  municipality,  in  addition 
to  a  fair  profit  to  the  corporation  supplying  it.  In  fact, 
there  is  just  now  a  strong  demand  that  the  municipality 
shall  exact  from  the  quasi-public  corporations  a  compen- 
sation for  their  franchises,  which  is  but  another  form  of 
saying  that  the  municipality  should  share  the  profits  of 
the  private  corporation,  and  it  is  assumed  that  the  rates 
charged  would  be  sufficient  to  permit  of  such  a  division  of 
profits. 

As  to  quality  and  efficiency  of  service,  it  should  be  pos- 


QUASI-PUBLIC  CORPORATIONS  233 

sible  for  the  citizens  of  a  municipality  to  determine  the 
matter  for  themselves.  Whether  they  prefer  an  inferior 
and  cheap  service  or  a  superior  and  more  expensive  one,  is 
a  question  in  which  they  are  more  deeply  interested  than 
either  the  municipal  government  or  the  private  corpora- 
tion. They  should  have  whatever  they  are  willing  to  pay 
for.  It  is  needless  to  say  that  this  is  not  the  case  at 
present,  although  the  people  sometimes  succeed  by  indirect 
methods  in  forcing  much  needed  improvements. 

The  reader  will  probably  feel  that  the  whole  drift  of 
this  chapter  is  toward  impossible  ideals,  rather  than 
toward  a  practical  solution  of  the  problems  we  are  consid- 
ering. If  so,  let  him  remember  that  the  ideal  must  pre- 
cede the  practical.  It  is  only  after  we  have  arrived  at 
what  we  consider  the  best  ideal  solution  of  an  economic 
or  industrial  problem  that  we  are  prepared  to  attempt 
that  solution  along  practical  everyday  lines.  Having  in 
mind  what  would  be  best,  we  try  to  achieve  the  nearest 
practical  approximation  to  it. 

The  underlying  idea,  it  will  be  noticed,  in  what  has 
been  said,  is  that  of  cooperation,  rather  than  of  antag- 
onism between  the  municipality  and  the  quasi-public 
corporation.  The  phrase,  "community  of  interest,"  so 
familiar  to  the  public  just  now,  expresses  very  well  the 
ideal  relation.  The  problem  is  to  enlist  private  capital 
to  supply  our  public  service  utilities  upon  an  investment 
instead  of  upon  a  speculative  basis,  in  such  a  way  that  the 
capital  shall  be  assured  a  fair  return,  and  the  municipality 
shall  be  assured  of  good  service  at  reasonable  prices.  It 
may  be  roughly  compared  to  ordinary  municipal  financing. 
The  municipality  needs  money,  and  is  willing  to  pay  for 


234  MUNICIPAL  PUBLIC   WOKKS 

its  use.  The  capitalist  stands  ready  to  supply  the  money 
upon  terms  mutually  agreed  upon,  feeling  confident  that 
every  engagement  of  the  municipality  will  be  met  and 
that,  therefore,  his  investment  is  secure  ;  and  the  transac- 
tion becomes  mutually  satisfactory.  Even  in  the  absence 
of  good  faith  on  the  part  of  either,  each  party  is  amply 
protected  by  carefully  drawn  laws  which  define  and  guard 
their  respective  rights.  Now,  it  should  not  be  merely  and 
hopelessly  ideal  to  conceive  that  some  such  relation  is 
practically  attainable  between  municipalities  and  quasi- 
public  corporations.  It  may  and  doubtless  will  take 
time  to  formulate  and  crystallize  into  practice  the  prin- 
ciples, laws,  and  practical  details  through  which  such 
a  result  may  be  accomplished,  but  if  true  progress  lies 
in  that  direction,  we  cannot  turn  our  faces  that  way  too 
soon. 

By  what  means  and  through  what  agencies  may  such  a 
state  of  affairs  be  brought  about?  Upon  this  question 
there  is  room  for  wide  differences  of  opinion,  and  there  is 
need  of  careful  study  and  intelligent  experiment.  There 
is  to-day  no  more  promising  field  for  the  best  efforts  of  the 
statesman  and  lawmaker,  the  economist,  the  student  of 
municipal  government,  and  the  industrial  expert,  than  the 
one  we  are  considering.  Whether  we  look  at  it  from  the 
point  of  view  of  the  capital  invested,  or  of  its  bearing 
upon  the  material  prosperity,  the  health  and  the  happi- 
ness of  the  twenty-five  millions  of  people  living  in  our 
cities  and  towns,  we  must  concede  that  there  are  few  more 
important  problems  before  us. 

Without  assuming  any  expert  knowledge  of  the  subject, 
or  claiming  that  the  views  expressed  are  new,  I  venture  to 


QUASI-PUBLIC   CORPORATIONS  235 

outline  a  plan  which  ought  to  be  workable,  and  should 
offer  a  solution  of  what  is  now  a  difficult  problem. 

All  quasi-public  corporations  should  be  organized  and 
operated  under  a  general  state  law. 

The  provisions  of  such  a  law  should  be  so  radical  and 
far-reaching  as  to  assume,  within  the  limitations  found 
necessary,  the  absolute  control  of  quasi-public  corpora- 
tions, and  of  the  relations  between  them  and  the  munici- 
pal corporations.  Only  so  much  should  be  left  to  the 
discretion  and  judgment  of  municipal  governments  as 
may  be  absolutely  necessary.  It  will  be  at  once  ob- 
jected that  such  legislation  would  be  subversive  of  the 
principle  of  local  self-government,  a  principle  that  should 
be  fostered  and  protected,  rather  than  suppressed.  To 
this  it  may  be  replied  that  the  legislation  contemplated 
would  be  general  in  character,  applying  to  and  being  for 
the  benefit  of  all  municipalities ;  that  it  would  deal  with 
a  matter  which  the  local  municipal  governments  are  ad- 
mittedly seldom  competent  to  handle,  —  a  matter  requir- 
ing a  degree  of  ability,  wisdom,  and  careful  investigation, 
and  an  amount  of  expert  knowledge,  that  members  of  city 
councils  seldom  possess  and  have  not  the  time  and  oppor- 
tunity to  acquire  ;  that  it  would  prevent  the  hasty  and 
ill-advised  granting  of  franchises  that  are  to  continue  in 
force  for  a  generation,  or  longer,  with  all  the  burdens 
they  impose  on  the  public,  and  that  it  would  effectually 
block  unscrupulous  corporations  from  securing,  through 
the  corruption  and  bribery  of  city  councils,  rights  and 
powers  they  could  not  hope  to  secure  in  any  other  way. 
If  it  would  successfully  accomplish  these  things,  no  nar- 
row theories  of  local  independence  and  home  rule  can  be 


236  MUNICIPAL   PUBLIC   WORKS 

successfully  urged  against  it.  "  The  greatest  good  to  the 
greatest  number  "  is  a  maxim  that  must  be  followed,  even 
if  it  involves  some  curtailment  of  individual  liberty. 

In  the  framing  of  such  a  general  law,  sufficient  time 
and  deliberation  could  be  devoted  to  it  to  work  out  its 
every  feature  and  detail  in  the  most  perfect  manner.  The 
best  statesmanship  and  legal  acumen,  the  ablest  expert 
knowledge,  and  the  best  civic  talent,  aided  by  wide  ex- 
perience, would  doubtless  be  enlisted  in  framing  its  pro- 
visions, and  the  result  should  be  a  wise  and  comprehensive 
code,  under  which  justice  and  equity  to  both  the  private 
and  the  municipal  corporation  would  be  assured.  Its 
enactment  and  application  would  relieve  the  municipal 
authorities  of  one  of  the  most  difficult  and  responsible 
duties  they  are  now  called  upon  to  perform,  and  the 
municipality  of  one  of  the  most  dangerous  possibilities 
of  municipal  misgovernment.  No  longer  would  it  be 
possible  for  a  council  elected  for  a  short  term,  and 
without  the  necessary  qualifications  for  such  important 
duties,  to  enact,  hastily  and  without  proper  consideration, 
franchises  that  must  bind  the  municipality  for  a  long 
period  of  years.  Such  a  law  would  assure  uniformity  in 
the  organization  and  management  of  quasi-public  corpora- 
tions, which  is  most  desirable.  Its  provisions  would  soon 
become  generally  understood,  and  both  the  citizen  and  the 
stockholder  would  know  exactly  where  each  should  stand 
and  what  were  the  legal  rights  and  duties  of  each  to  the 
other.  It  would  become,  within  the  state,  and  in  the 
field  of  quasi-public  corporations,  what  the  National  Bank 
Act  is  in  the  domain  of  banking,  or  what  the  Interstate 
Commerce  Act  is  in  the  field  of  railroad  transportation. 


QUASI-PUBLIC   CORPORATIONS  237 

Such  a  law  should  prescribe  a  means  for  fixing  and  con- 
trolling the  capital  of  these  corporations  so  as  to  prevent 
overcapitalization  in  the  beginning,  and  inflation  or 
"  stock  watering "  thereafter ;  should  provide  for  the 
establishment  and  modification  when  necessary,  of  rates 
for  service  ;  for  the  disposition  of  the  net  earnings  of  the 
corporation ;  for  the  auditing  and  publication  of  accounts, 
and  for  the  adjustment  of  controversies  that  might  arise 
between  the  municipality  and  the  corporation. 

One  of  the  most  important  of  its  provisions  would  be 
the  creation  of  a  commission  or  board  which  would  have 
charge  of  the  administration  of  the  law.  This  board 
should  be  composed  of  men  of  special  ability  and  of  the 
highest  character,  appointed  for  long  terms  of  office,  and 
in  some  way  that  would  make  them  as  independent  as 
possible  of  politics  and  political  influence.  The  functions 
of  this  board  would  be  both  administrative  and  judicial. 
It  would  resemble  in  its  powers  and  duties  the  Inter- 
state Commerce  Commission  of  the  United  States. 

When  a  corporation  should  apply  for  organization  under 
the  law,  the  board  would  examine  its  plans  and  estimates 
of  cost,  and  would  approve  or  modify  the  amount  of  its 
proposed  capital  stock,  which  thereafter  could  not  be  in- 
creased without  its  authorization.  It  would  consider,  and 
approve  or  modify,  after  hearing,  the  rates  proposed  for 
the  service  to  be  supplied,  and  would  have  the  power  to 
modify  these  rates  when  convinced  that  the  condition  of 
the  business  demanded  or  warranted  such  change.  It 
would  have  authority  to  require  the  corporation  to  in- 
crease its  plant  and  extend  its  service  when  the  needs  of 
the  municipality  demanded  such  enlargement  or  exten- 


238  MUNICIPAL   PUBLIC   WORKS 

sion,  provided  the  demands  were  justifiable  and  reason- 
able. To  enable  the  board  to  act  intelligently  in  all 
these  matters,  each  corporation  would  submit  to  it  an- 
nually a  full  report  of  its  operations,  receipts,  and  ex- 
penditures. The  board  would  be  empowered  and  directed 
to  examine  and  audit  the  accounts  of  the  corporation,  to 
certify  to  the  correctness  of  the  reports,  and  to  make 
these  reports  public.  Such  publicity  of  accounts  would 
not  be  objectionable  to  the  owners  of  the  corporation,  since, 
under  the  system  contemplated,  the  dividends  to  the  stock- 
holders would  be  guaranteed  not  to  fall  below  a  minimum, 
and  would  be  restricted  to  a  maximum,  and  all  surplus  earn- 
ings would  be  divided  between  the  corporation  and  the 
municipality  in  a  stated  ratio.  Publicity  of  accounts  would, 
alone,  be  a  very  valuable  advance  upon  present  practice, 
and  would  prevent  much  of  the  dissatisfaction  and  contro- 
versy that  now  prevail,  since  it  would  disclose  the  actual 
condition  of  the  business  and  enable  the  public  to  judge 
correctly  of  the  reasonableness  of  charges  made  for  service. 

In  short,  the  board  would  have  general  control  of  all 
corporations  organized  under  the  law,  and  would  act  as 
arbiter  in  all  differences  that  might  arise  between  the 
municipalities  and  the  corporations.  Such  a  tribunal 
should,  and  doubtless  would,  command  the  confidence 
of  the  public  and  of  all  parties  interested,  and  its 
influence  and  rulings  could  not  be  otherwise  than  bene- 
ficial to  the  just  interests  of  all. 

Under  the  operations  of  such  a  law,  administered  by 
such  a  board,  capital  would  feel  secure,  and  both  the 
stockholders  and  the  public  could  safely  rely  upon  being 
treated  fairly  and  justly. 


QUASI-PUBLIC  CORPORATIONS  239 

The  scheme  here  outlined  has  been,  and  will  continue 
to  be,  pronounced  impracticable  and  chimerical  by  the 
class  of  corporations  whose  interests  it  would  affect, 
and  by  the  local  politicians,  whose  power  and  influence 
it  would  tend  to  abridge,  as  well  as  by  some  earnest 
and  able  students  of  municipal  problems.  Nothing  short 
of  a  fair  trial  for  a  sufficient  period  of  time  will  prove 
whether  its  advocates  or  its  opponents  are  right  or  wrong. 
The  former  may  truthfully  assert  that  it  could  not  well 
prove  more  unsatisfactory  than  the  existing  state  of  affairs, 
and  that  there  is  good  reason  to  believe  that  it  would 
greatly  improve  present  conditions,  even  if  it  did  not 
accomplish  all  that  is  claimed  for  it.  They  can  point 
with  confidence  to  the  results  of  such  partial  attempts 
as  have  been  made  in  this  and  other  countries  toward 
a  solution  of  these  troublesome  problems  along  similar 
lines.  There  are  certainl}''  enough  facts  and  arguments 
in  its  favor  to  warrant  a  fair  trial  of  it  in  actual  use. 

But  this,  or  any  other  new  legislative  action,  could  not 
be  ex  post  facto  in  its  operation,  and  would  therefore  apply 
to  new  quasi-public  corporations  only.  The  pressing  prob- 
lem in  most  of  our  cities  is  how  to  deal  with  corporations 
that  now  exist,  intrenched  behind  irrevocable  franchises 
having  many  years  yet  to  run.  What  can  be  done  with 
these?  No  explicit  general  answer  can  be  given.  Each 
one  must  be  dealt  with  according  to  the  circumstances  of 
its  special  case.  Even  where  such  a  radical  measure  would 
be  justified,  it  is  usually  impossible  to  revoke  the  fran- 
chises of  the  corporations  and  sweep  them  out  of  existence, 
and  in  too  many  cases  these  franchises  reserve  to  the  mu- 
nicipality little  or  no  power  to  enforce  regulative  measures. 


240  MUNICIPAL  PUBLIC  WORKS 

The  most  hopeful  feature  of  the  situation  is  found  in  the 
fact  that  these  corporations  are  manifesting  an  increasing 
respect  for  public  opinion,  and  that  not  a  few  of  them  are 
awaking  more  and  more  to  the  fact  that  their  true  interests 
will  best  be  served  by  a  policy  of  conciliation  and  coopera- 
tion, rather  than  one  of  antagonism  to  the  municipality 
and  the  public.  They  are  finding  too  that  a  liberal  policy 
in  supplying  what  the  public  demands  in  the  way  of 
reasonable  rates  and  improved  service  generally  results 
in  expanding  their  business  and  increasing  their  profits. 
They  may  often  be  persuaded  to  make  concessions  that 
they  could  not  be  legally  forced  to  make.  It  would  seem 
the  wisest  policy  on  the  part  of  the  municipality  to  meet 
this  disposition  on  their  part  in  a  reasonable  spirit  of  con- 
cession and  compromise,  and  thus  to  make  the  best  of  a 
situation  that  cannot  be  wholly  cured  and  must  therefore 
be  more  or  less  endured.  Half  a  loaf  is  undoubtedly 
better  than  nothing,  and  should  be  accepted  if  to  secure 
the  whole  loaf  is  impossible.  It  will  probably  be  found 
that  in  most  cases  more  can  be  accomplished  by  conciliatory 
action  and  a  disposition  to  meet  the  corporation  frankly  on 
a  reasonable  basis  of  settlement  than  by  hostile  or  retalia- 
tory measures.  Unfortunately,  the  public,  not  always 
fully  informed,  and  generally  disposed  to  hasty  action, 
will  clamor  for  a  fight,  and  the  public  officer  who  shows 
a  disposition  toward  a  more  moderate,  though  more 
promising  course,  is  likely  to  be  misjudged  and  abused, 
even  by  good  business  men  who  in  conducting  their 
personal  affairs  always  endeavor  to  compromise  cases 
where  the  law  is  not  very  clearly  on  their  side.  Public 
clamor  is,  however,  not  always  a  safe  guide,  and  should 


QUASI-PUBLIC  CORPORATIONS  241 

be  disregarded  when  it  is  clear  that  the  interests  of  the 
public  may  be  better  served  by  doing  so.  Should  the 
corporation  reject  overtures  for  a  fair  and  reasonable 
adjustment  of  differences  the  municipality  will  be  fully 
justified  in  declaring  war  and  prosecuting  it  to  the 
bitter  end,  and  the  corporation  will  deserve,  and  should 
be  given,  no  quarter. 


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